Episode 175: Distressed Credit and Special Situations with Paul Triggiani of Invesco

In this episode of the InsuranceAUM.com podcast, Stewart Foley, CFA, delves into the world of private distressed credit and special situations with Paul Triggiani, Managing Director and Head of Distressed Credit and Special Situations at Invesco Private Credit. Paul shares his insights on the definition of distressed debt, the types of distressed assets his team specializes in, and how they approach the management of these investments. He highlights the differences between trading distressed debt and pursuing debt for control, explaining that his team focuses on acquiring majority positions in distressed debt to eventually convert it into equity ownership. Paul also discusses the broader macroeconomic environment, emphasizing how the growth of the leveraged credit market, particularly in Europe, has expanded the opportunity set for distressed investors.

Paul further explores how Invesco assesses credit risk, the importance of buying assets at a discount to their intrinsic value, and the firm's focus on mitigating downside risk. He explains how rising interest rates have impacted small-cap borrowers and how these challenges have influenced Invesco’s strategies. Additionally, Paul highlights the increasing role of special situations transactions, such as rescue financings, as private equity firms proactively address liquidity needs. The episode concludes with a discussion on the attractive features of distressed debt for insurance companies, emphasizing its potential for generating equity-like returns with credit protection.