Distressed debt investors are increasingly looking abroad for opportunities as markets outside the U.S. continue to grow. Investors in Las Vegas last week talked up the opportunities in Europe and Asia. "It is becoming a global market. Successful distressed debt investors will look at international opportunities," said Maria Boyazny, principal at Siguler Guff & Company, a New York-based private equity firm with more than $3 billion of assets under management.
Investment opportunities Boyazny cited include Southeast Asia, where the Asian financial crisis has created a large number of troubled companies. Although many of these companies have been worked out, Southeast Asian countries still carry close to $150 billion of non-performing loans, she said. China has $500-700 billion of non-performing loans and even India has an estimated $30 billion of non-performing loans. Europe has an estimated $600 billion of non-performing paper, with Germany alone accounting for $160-300 billion of that.
Investors stressed that for companies to do business successfully in international markets they should set up shop there and understand the different legal systems of these countries. "You could do business in these markets out of New York and Connecticut, but it is a recipe for disaster. Successful investors will have offices and relationships on the ground," said Boyazny.