Sources of turnaround capital: What's the alternative?

Sources of turnaround capital: What's the alternative?

When it comes to sources of turnaround capital for stressed and distressed assets, necessity and opportunity are causing the Australian market for capital to mature – reflecting a powerful structural change in funding models.

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For a range of alternative investors, including Australian and international hedge funds, special situation funds and others, the banking sector has been less willing to lend given their stronger desire to manage their impaired loan books, limit sector exposure and the impact of new capital adequacy requirements.

This article, What’s the alternative?, explores alternative funding sources for stressed and distressed assets. It covers:

  • turning points in the Australian market that has helped it to catch up with Europe, the US and parts of Asia
  • the deep pool of investors interested in buying in Australia
  • what investors are looking for in this highly competitive market.

Ultimately, as market conditions continue to exhibit a high degree of volatility either as a result of commodity price movements or disruptive new businesses, corporates will need to seek support from alternative funding sources to help them trade through these events. The good news is, new and alternative pockets of liquidity are emerging for Australian borrowers and they are here to stay as a permanent feature of the Australian debt and equity capital markets.

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