Once we have invested in a company, we provide considerable support to Portfolio Companies by assisting with strategy, management and board composition, and optimizing the capital structure. We have significant experience in this area, especially as regards the skills of providing strategic advice and leadership in complex and uncertain situations, as well as unrivaled execution skills. Furthermore, our ability to monitor and constantly review, revise and adapt the strategy in a changing environment, whilst providing the financial stability required for a successful implementation of the new strategy, inures to the benefit of each Portfolio Company.
Our founding partners, Ramon Betolaza and Jose Manuel de la Infiesta have over 50 combined years’ experience in distressed for control and activist special situations investing globally. We have a proven capability in investing in complex, large and medium-sized distressed, restructuring and recovery situations by leveraging their knowledge and their professional relationships. The founding partners bring with them track records demonstrating their ability to operate successfully in the imperfect information environment typical in distressed situations.
BTC’s investment strategy is to effect “partnership and control” deals with liquidity-constrained mid-sized companies in Spain. Whilst there are many funds in Spain focusing on more liquid distressed debt trading, mezzanine and senior debt lending strategies, few firms focus on pro-active ownership. Even then, the predominant model among them is to seek majority corporate control of the target company at the outset with a view to selling it on. In contrast, we believe that our “partnership and control” strategy is more appropriate in the Spanish arena where, there is a predominance of management-owned businesses, and where there is the structural lack of depth in capital markets as a source for financing for medium-sized companies. We believe our approach reduces the variability of outcomes and provides better risk-adjusted returns for investors.
We are focused in Spain, where there still is a majority of privately controlled and owned companies and a widespread liquidity shortage even for good businesses. While there is always a steady flow of companies undergoing financial distress for many reasons every year, we believe the recent crisis has created a continued supply of investment opportunities over the coming years as banks and other financial institutions continue to de-lever and rationalise their own balance sheets due to internal and regulatory constraints.
Our ability to rapidly and quietly evaluate transaction opportunities, provide certainty to meet deadline dates and promote flexible investment solutions which allow existing stakeholders to remain engaged in the business will appeal to owners of target companies and is a differentiating factor when competing for deals. While traditional private equity funds often require outright control in order to make an investment and traditional mezzanine funds are limited in their ability to invest in pay-in-kind securities or equities, BTC is structured with the flexibility to invest across a broad spectrum of instruments and to purchase debt securities in the secondary market that it can then use for debt to equity swaps and thereby de-leverage the Portfolio Company’s balance sheet.