Discover what Distressed Assets are

Distressed assets are assets that have declined in value and/or no longer meet the financial obligations of a borrower. Distressed assets may be companies, bonds, financial assets or securities, and may include property, financial assets or machinery.

Distressed assets are acquired by investors at prices below market value, given the risks and uncertainties associated with their investment. These investors may be interested in distressed assets for either: liquidation, reorganization, restructuring, capital injection or venture capital injection. Once assets have been identified, investors can align their investment strategies and make investment decisions.

The distressed asset market is highly complex, and risks are high, as there is often uncertainty as to the true value of assets. Investors can minimize their risks by taking extra precautions to correctly value and secure their investments. Another risk is linked to the length and complexity of the arbitration procedure.

Investors in distressed assets generally focus on long-term returns as part of their investment strategy. Distressed assets can represent attractive investment opportunities if the investor is able to correctly assess value and recovery potential, and if risks are clearly identified and managed.