Distressed Asset Acquisition & Bid Enhancement
At Asset Management & Trust, we guarantee our clients and partners with a material competitive advantage in obtaining distressed assets and put them in a position where they choose some of the best assets on an arranged basis by becoming the chosen buyer among lenders acquiring such assets. We accomplish this by combining buyers with an integrative problem-solving method towards the uncommon disputes facing distressed sellers.
At present, banks and investment companies cling to their distressed assets to obstruct their losses or in hopes that increasing values will eventually reduce their losses. Thus, the amount of distressed asset transactions remains lower than average. As opposed to original market expectations, only a relative amount of distressed assets has been available for purchase—predominantly the market dregs—while investors wait on the sidelines for a valuation that may not occur.
This deadlock illustrates the "bid and ask" gap. The balance sheets of lenders are filled with and non-performing assets because they believe the integral value of their property is much more than market prices. Investors, after raising billions of dollars in capital signified on acquiring returns of 20–25% or more have only contributed a portion of their committed equity. These transaction levels will remain stationary unless sellers cut down their prices and/or buyers lessen their income requirements.
This market is prevalent with sellers and buyers who have incorrectly priced their assets and equity, respectively. Accordingly, they have not closed the gap between “bid and ask.”
When aiming at a particular acquisition or restructuring assignment for a client, Asset Management & Trust uses an integrative approach to create an improved bid. The company has established proficiency in organizing complicated transactions, making use of what we have learned in accounting, tax, and bankruptcy.
We have devised proprietary formats to close the bid–ask gap and take advantage of the new modifications in mark to market accounting rules and also arcane bank regulatory accounting to unravel these assets from lender balance sheets and authorize our clients to achieve the economics of distressed real estate while reducing write-downs to the financial institutions.