Credit investors are obligated by fiduciary duty to seize value creation
Andrew Milgram · Andrew Milgram – Mid-Market Distressed Investing at Marblegate (Manager Meetings EP.29) · Apr 21, 2022 · at 33:37
Andrew Milgram, CIO of Marblegate Asset Management, responds to whether zero-sum restructurings and aggressive creditor maneuvers are justifiable for distressed debt managers.
0:00 / 0:14exact quote · 14.1s
720p mp4 · rendered on demand · StarZero watermark
“And I think there's a much more level playing field today, and I think that, look, we all have a fiduciary duty to the investors we serve, and so if the opportunity for value creation exists, it's your obligation to take it.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Andrew Milgram
Creditor-on-creditor violence and priming transactions will increase in coming years
“And this creditor on creditor violence is a rising trend that I don't see going away anytime soon. Until the creditor groups start to write tighter credit agreements, or the courts define very narrow guidelines around how these credit agreements can be interpr…”
NYC yellow taxi driver profitability is superior to Uber driver earnings
“The profitability of a yellow taxi driver was superior to that of an Uber driver.”
Many levered borrowers are already unable to satisfy their debts
“What we see today as we look at the earnings power of companies that we're talking to lenders about, that they are in that place already. They are facing real inability to satisfy their debts as they come due, which is one of the classic destinations of insolv…”
UBS was effectively insolvent before 1998 Swiss Bank merger, says Milgram
“UBS was effectively insolvent and there'd been a shotgun marriage forced by the Swiss national bank.”
Distressed assets sometimes trade at valuation premiums to public comps
“So I can tell lots of stories about where you would see something trading in the distress market at a premium from a valuation perspective, to where it's public market comps are trading, which I view is literally insane, but it happens and it happens, believe …”
Restructuring will drive contract price resets across multiple sectors
“We haven't seen that kind of opportunity since like the early 2000 when natural gas spiked and we had to do a sort of price reset through the petrochemicals chain. But it strikes me that we're going to see that across a number of sectors in the coming period.”