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Why Newport Global Advisors
Our strategy is opportunistic and flexible, allowing us to take advantage of sector driven dislocations and idiosyncratic situations. We build investment portfolios with a focus on companies with leveraged balance sheets experiencing some level of stress, causing markdowns in the value of its debt obligations. Our investment style is based on fundamental company analysis, concentrating on asset coverage and free cash flow with an emphasis on capital preservation.
Newport Global Advisors manages various investment vehicles, including a distressed for control private equity fund, a distressed credit hedge fund and separately managed accounts.
Our distressed for control strategy seeks to control target companies by purchasing distressed debt at attractive valuations and restructuring balance sheets through debt for equity exchanges.
We target small and mid-cap companies with clearly identified challenges, which we resolve either through balance sheet restructurings or through operational changes. When identifying target investments, we engage in a rigorous analysis of the target company’s operational, financial, and liquidity risks, and determine whether resolving the identified challenges is likely to achieve an attractive future valuation. We also implement identifiable financial and operating improvements after we take control to increase the company’s valuation. Through active board of director level involvement, we shepherd each control investment to improve operational efficiencies and increase profitability to improve enterprise value. Once accomplished, we utilized a typical array of private equity exit strategies to provide liquidity to our investors.
Our hedge fund structure seeks to achieve a high level of current income and capital appreciation by pursuing opportunities from current and future market dislocations.
We invest in debt securities of distressed companies as well as reorganized equities and our diversified portfolios typically consist of 20-30 investments. We focus on discounted leveraged loans, high yield securities, mezzanine debt, convertible debt securities and post reorganized equities of small and mid-cap companies. We do not utilize portfolio level leverage to enhance returns in the portfolio.
Investment Philosophy
The same rigorous analysis and skill that proficient at sourcing and acquiring attractive portfolio companies creates also enables us to identify paths to increase valuations post acquisition. Our process is fundamentally driven, focusing on asset coverage and free cash flow, with an emphasis on capital preservation.
We invest in companies with enterprise value between $50 – $750 million. Our downside protections are particularly effective in the small- to mid-capitalization arena. We believe in an opportunistic and flexible strategy, allowing us to take advantage of sector driven dislocations or idiosyncratic situations, which are more common in smaller companies.
While identifying target investments, we engage in a rigorous analysis of the company’s operational, financial and liquidity risks, along with any identifiable challenges. We invest in companies with long-term attractive value based on comparisons to competitors and historic valuations.
We invest in debt securities of distressed companies as well as reorganized equities and our diversified portfolios typically consist of 20-30 investments. We focus on discounted leveraged loans, high yield securities, mezzanine debt, convertible debt securities and post reorganized equities of small and mid-cap companies. We do not utilize portfolio level leverage to enhance returns in the portfolio.
Experienced and Cohesive Team
The Newport Global Advisors team has extensive expertise in the leveraged capital markets, including experience in balance sheet restructurings and bankruptcy reorganizations. Our Principals each have decades of experience investing in leveraged loans, high yield bonds and the alternative asset markets through numerous market cycles.