Corsair’s senior executives have significant experience investing in periods of dislocation in global financial markets, and have also acted in an advisory capacity assisting governments and companies navigate market cycles for almost 40 years. During this process, we have accumulated institutional knowledge from common and recurring themes throughout the world.
Since 1992, we have earned a reputation as a leading private equity firm with a proven record investing in distressed companies. Corsair looks for opportunities throughout the financial services industry where sound businesses with strong management teams face specific challenges, including liquidity constraints, capital shortages, and unfavorable market sentiment.
The financial services industry accounts for a large proportion of global equity indices and capital investments, therefore, significantly impacting national and regional economies. Given the size of the financial services industry and its interrelationship with macro-economic conditions, there is a consistent flow of distressed investment opportunities.
Major events, such as currency devaluations, sovereign defaults, significant geopolitical changes, or natural disasters have historically triggered subsequent sectoral disruptions within the financial services industry. Examples include (i) the property and stock market correction effecting Sweden’s banking system (1992-1995); (ii) the Asian currency crisis’ destabilization of regional financial institutions (1997-2000); (iii) the bursting of the U.S. equity bubble and the effect on the global property and casualty insurance sector following the terrorist acts of September 11, 2001 (2000-2002); and (iv) the impact of the severe downturn in real estate prices in the U.S. and the subsequent crisis of the global banking system (beginning in 2007). These events can require companies to recapitalize or restructure.
Other distressed opportunities may present themselves in instances when companies (i) misjudge credit risk, (ii) misprice or inappropriately design financial products, or (iii) suffer from adverse funding cycles driven by the ebb and flow of global liquidity.Corsair’s exclusive focus on financial services investing has enabled us to distinguish between shorter-term dislocations and longer-term systemic problems, allowing us to identify investment opportunities in areas which may be considered out of favor by others. Corsair uses its broad resources to help distressed financial services businesses identify their core competencies and dispose of non-core businesses and assets while working to improve market perception of the company’s value. We work alongside management to recruit senior executives, advisors and board members and we leverage our extensive relationships with industry regulators and rating agencies, and leading strategic partners.