bankruptcy. During that time, the firm
gained a solid perspective of what had
to be accomplished for the company
to succeed. The firm identified issues
that needed immediate attention and
ascertained what skills were required
with particular stakeholders. Had the
firm not lived and breathed the business
for those three months, it might not
have understood what essential skills
were needed and might have made
some poor hiring decisions as a result.
The time in the trenches can give an
investor time to gather information,
add to its confidence in assessing
situations accurately, and offer
opportunities to get to know customers,
suppliers, and even competitors better.
Each of those information pockets
can prove extremely valuable.
Today’s economic landscape also
must be factored into management
assessments. Because of the deep
recession and the slow rebound,
many distressed companies have
continued to bump along the financial
bottom. In terms of moving more
swiftly to turn operations around, a
company may need executives who
are more nimble, more efficient with
their time, and more knowledgeable
Chad Peterson is an investment professional at
Victory Park Capital. Previously, he worked at Qorval
LLC, a turnaround advisory and interim management
firm focused on the middle market, and was a part
of the Special Situations Group at American Capital,
where he focused on making both debt and equity
investments in troubled and underperforming
businesses. Peterson holds a bachelor’s degree
in finance and decision sciences from Miami
University in Ohio and an MBA from the Kellogg
School of Management at Northwestern University.
about how to boost business and
profits after an economic downturn.
Seeds of Success
The importance of the management
team in a distressed or turnaround
investment cannot be overstated.
Successful management teams:
1 Concentrate on issues that will have the most significant impact.
2 Make tough personnel decisions without delay.
3 Recognize that speed is usually more critical than perfection.
4 Stop doing things that aren’t necessary or that conflict with
5 Trim the fat, not the muscle, of an organization.
6 Communicate frequently with all stakeholders.
7 Liberate or at least unfreeze the organization.
A strong leadership team also
must remember one other crucial
maxim: While a focus on survival is
necessary, that alone isn’t enough
to succeed, grow, and prosper. J
We at AloStar did what most people
would say couldn’t be done.
At AloStar, we’re about growing the companies that grow our country. And we believe
any environment offers the possibility of growth. With this mindset, we completed
10 Asset-Based Lending deals in 10 weeks. In the course of doing so, we met amazing
people and experienced the resolve of phenomenal companies – companies we came to
believe in, companies we want to praise, companies we are proud to serve.