Distressed assets

Strategic investment focused on operational transformation

Value creation in complex situations

While our primary focus remains on strategic M&A services, Camaya Partners selectively engages in distressed asset investing when we identify exceptional opportunities where our operational expertise can generate substantial value beyond traditional capital investment. This activity naturally extends from our deep market knowledge and transaction experience, enabling us to participate directly in value creation while maintaining our core service mission.

Our approach to distressed asset investing is highly selective and focused. We consider investments only when there are no conflicts of interest with our clients and when we can leverage our cross-border transaction experience to unlock extraordinary value through strategic operational transformation. This expertise provides unique insights into distressed situations that purely financial buyers often overlook. As we deploy our own capital in these opportunities, we align our interests with long-term value creation and enable greater decision-making flexibility.

Beyond capital: Strategic operational transformation

Our distressed asset investment philosophy focuses on identifying fundamentally sound businesses facing temporary financial or operational difficulties. By systematically analyzing industry dynamics, competitive positioning, and operational inefficiencies, we target companies where our strategic guidance and operational skills can drive sustainable turnarounds.

This hands-on approach to value creation goes far beyond financial restructuring. We emphasize operational improvements, strategic repositioning, and management enhancement to turn distressed situations into successful businesses. Our investment criteria prioritize companies with strong fundamentals, defensible market positions, and clear pathways to operational improvement, situations where strategic guidance can unlock significant embedded value.

Value creation in complex situations

Beyond capital: Strategic operational transformation

What distinguishes our approach

Deep industry knowledge and international expertise

Our extensive experience across various sectors offers unmatched insights into industry dynamics, competitive landscapes, and operational best practices. This knowledge allows us to spot value-creation opportunities that other investors might miss quickly and to apply proven strategies for operational turnaround.

Strategic rather than purely financial focus

Unlike conventional distressed debt funds, our investment approach prioritizes strategic transformation over financial engineering. We seek situations where our operational expertise, industry connections, and strategic guidance can drive fundamental business improvements, rather than relying solely on capital structure optimization.

Selective investment philosophy

We adhere to strict investment criteria, focusing only on opportunities that align with our risk-return parameters and where our specific expertise can provide significant competitive advantages. This selectivity ensures our limited investment capital is used only in cases with high potential for value creation.

Proven success in complex turnarounds

With over twenty years of managing complex projects, we have deep experience in navigating operational, strategic, and cultural challenges often found in distressed situations. This expertise is crucial in executing successful turnarounds in challenging environments.

Why strategic timing matters

01. Our investments in distressed assets target companies with the following characteristics:

Annual revenues between $10-100 million in sectors where we possess deep expertise
Strong fundamental business aspects with defensible market positions facing temporary financial difficulties
Clear opportunities for operational improvement where our skills can drive lasting value
Management teams willing to work together on strategic transformation efforts
No conflicts of interest with current or prospective clients

02. Investment framework and expected returns

Control or significant influence over stakes to ensure operational improvements are executed
Active management involvement with consistent strategic guidance and operational oversight
A 3-5 year investment horizon, providing sufficient time for comprehensive transformation, though we retain complete flexibility to extend this period or remain indefinitely involved, depending on business performance and alignment with our strategic interests
Multiple exit options, including strategic sales, management buyouts, or refinancing

03. Expected investment outcomes

Based on our experience and market analysis, our distressed asset investments aim for:

IRR of 25-30%, depending on transformation complexity and market conditions
2-4x cash-on-cash returns over the investment period
Operational improvements of 30-50% in key performance indicators
Successful exit within 3-5 years through strategic sale or recapitalization

04. Investment decision criteria and risk management

Our investment choices follow a thorough evaluation process that includes:

Industry and competitor analysis leveraging our sector expertise
Operational review to identify specific areas for improvement
Management assessment and capability review
Financial modeling across various scenarios and stress tests
Legal and regulatory review, including cross-border compliance requirements

Investment philosophy and strategic approach

Our approach to distressed asset investing is rooted in the belief that creating extraordinary value requires more than just capital — it demands strategic vision, operational know-how, and proactive management. By applying our proven strategic skills directly to investment opportunities, we generate value for all stakeholders while achieving superior returns.

Latest Market Insights

AI Wars: Strategic M&A or Talent Acquisition?

This content is restricted to subscribers

...

Seven critical mistakes to avoid when selling a company

Practical insights on preventing a lack of preparation from decreasing value or derailing a deal. Introduction Over more than two decades advising entrepreneurs on mergers and acquisitions, I’ve learned that selling a company is not just a financial decision....

Reverse Disruption: When Old Economy Swallows the New

The mergers and acquisitions market in Brazil has been showing a dynamic that could be called reverse disruption. If, before, startups emerged to challenge traditional companies in sectors like banking, health, and retail, we now see the opposite – established...