A Southern investor plans to ramp up its distressed debt exposure and will open up a New York office devoted to the sector. Baton Rouge, La.,-based Commonwealth Advisors, which runs around $250 million in fixed income, plans to invest more actively in the sector as distressed opportunities increase, according to Walter Morales, president and cio. Morales declined to specify how much he wants to add to the sector.
The asset manager is bringing on board sell-sider Kevin Miller from BNY Capital Markets as a distressed debt portfolio manager and head of the New York office, which will be opened in the next few weeks. Miller was a lead salesman and managing committee member in the distressed debt group at BNY Capital. "We're on the cusp of a great distressed market and we're expecting a lot of defaults going forward, which will create a lot of opportunities," Miller said of his reason for moving. The office will eventually add four credit analysts, Morales said.
The distressed debt group will also buy protection in the default-swap market. Commonwealth has been historically a long-only manager, Morales said.