The Bank of Lithuania has approved the establishment documents of the INVL Partner Global Distressed Debt Fund I, a subfund founded by INVL Asset Management, one of Lithuania’s leading asset management companies. The new subfund will act as a feeder fund for a distressed debt fund established by a world-class investment management firm.
“We are always seeking out new ideas in the area of alternative investments. Investing in distressed debt is a completely new alternative investment niche in our region. We believe the local market is mature enough for that and will take advantage of the exclusive investment opportunities,” says Laura Križinauskienė, the CEO of INVL Asset Management.
Križinauskienė notes that debt is a less risky investment than equity. The main strategy for investing in distressed debt is to acquire corporate debt securities (often secured by assets) or bank loans at a discount. Returns are generated when an issuer resolves liquidity or solvency problems and redeems securities for their nominal value or when the company’s capital is restructured, converting debt to equity for example.
In addition, the global financial markets had not seen a crisis for more than a decade and companies borrowed a lot, but with the unexpected onset of the coronavirus pandemic the number of companies struggling to settle with creditors has multiplied, so now is a good time for investments of this type.
“We aim to give Baltic investors an opportunity to invest in world-class funds which would usually be hard for them to access due to high financial requirements. We’re currently working out terms of collaboration with one of the world’s leading distressed debt fund managers. So establishing a fund like this is an important step in opening the door to a new investment niche,” the CEO of INVL Asset Management says.
About INVL Asset Management
INVL Asset Management, one of Lithuania’s leading asset management companies, is part of the Invalda INVL group. The group’s companies manage pension and mutual funds, individual portfolios, private equity and other alternative investments. They have more than EUR 1 billion of assets under management, entrusted to them by over 200,000 clients in Lithuania and Latvia as well as international investors. Established in 1991, Invalda INVL has 28 years of solid experience managing private equity assets and developing market leaders in the Baltic States and the region of Central and Eastern Europe.
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