MatlinPatterson makes investments based on rigorous, disciplined, bottom-up fundamental credit research and analysis. Across our investment platform, each individual strategy team adheres to the same rigorous standards, and strives to be a leader in its respective niche. Our cohesive culture and the value we place on internal communication creates an environment for idea sharing and collaboration, enhancing value to our investors.
Our Guiding Investment Principles
Rigorous fundamental analysis lies at the heart of successful investing.
Our investment process centers on detailed financial analysis geared toward understanding a company’s free cash flow potential, its financial and non-financial obligations, as well as catalysts that may trigger a change in value. For companies in financial distress, we gain an understanding of the source of distress, the stakeholders participating in a restructuring process and the factors affecting the company’s ability to reorganize.
Multiple perspectives are essential to accurately assess corporate valuation.
Critical to any investment decision is a fundamental view of a company’s intrinsic value. While we employ traditional valuation techniques to determine a company’s value, we also perform a range of proprietary analyses uniquely suited to investing in illiquid and opaque segments of the credit markets. These factors, coupled with our understanding of restructuring and history of strong corporate management during turnarounds, enhances our ability to capitalize on market inefficiencies. Additionally, our knowledge of the U.S. bankruptcy code, insolvency litigation and regulatory environment in key jurisdictions enables us to understand the legal pitfalls that could impact returns on investment.
Risk management must be proactive and dynamic.
Many of the credit market segments in which we invest carry inherent risks associated with a lack of liquidity, uncertain cash flows, imperfect information and inefficient pricing. Each portfolio team has a strong focus on risk relative to projected return. We utilize several strategies designed to mitigate downside risk associated with credit specific risk, market volatility and tail risk. Each manager also employs strategy-specific risk tools.
Portfolio construction requires broad perspective and big picture thinking.
While individual investments within portfolios are selected primarily through fundamental bottom-up analysis, in constructing and managing our portfolios we carefully analyze external factors that may impact the performance and risk of the portfolio as a whole, including changing industry dynamics, market volatility as well as geopolitical and macroeconomic conditions. As timing is an integral factor in accurately assessing return potential, we leverage our operational expertise to structure positions across our control and non-control investment strategies.