MatlinPatterson Global Advisors
Encyclopedia
MatlinPatterson Global Advisers is a private equity
firm focused on distressed investments
across a range of industries. Typically the firm seeks to make control investments in the companies in which it invests.
The firm, which is headquartered in Midtown Manhattan
in New York City
, was founded in 2002 by David Matlin and Mark Patterson
, as a spinout from Credit Suisse First Boston
.
The firm has raised approximately $8.9 billion since inception across three funds. In 2007, the firm completed fundraising for its third and largest fund with $5.0 billion of investor commitments. The firm's previous funds raised $2.2 billion (Fund I, 2002) and $1.7 billion (Fund II, 2003), respectively.
, as a spinout from Credit Suisse First Boston
. The two had worked together at Credit Suisse
and previously at Scully Brothers & Foss. Prior to founding the firm, Matlin was a Managing Director at Credit Suisse
, and head of the Distressed Group since its inception in 1994. Patterson, the older of the two founders, had worked in various positions, particularly in Leveraged Finance, at Credit Suisse
, Scully Brothers & Foss, Salomon Brothers
and Bankers Trust
.
When the firm raised its first fund in 2002 with $2.2 billion of investor commitments, it did so with more than $450 million of capital from Credit Suisse
. Credit Suisse did not invest in the firm's second fund which raised $1.7 billion in 2003, but did invest in the third fund which raised $5.0 billion of investor commitments.
In 2007, MatlinPatterson also raised its first hedge fund
, the MatlinPatterson Distressed Opportunities Fund to make non-control investments in distressed securities
.
The firm was also a significant purchaser of WorldCom bonds. The company later was renamed MCI Worldcom and later more simply to MCI prior to its subsequent acquisition by Verizon.
MatlinPatterson has also made several investments in the energy sector, becoming the largest shareholder of NRG Energy
, which was the country’s third largest independent power company, as well as acquiring several power generation facilities in the Southeastern United States and Buenos Aires, Argentina.
MatlinPatterson has made notable investments in the airline industry including ATA Holdings of which "mainline carrier," ATA Airlines
and "regional carrier," Chicago Express (C8) was a part (but d/b/a ATA Connection), and later acquiring Global Aviation Holdings—North American Airlines
and World Airways
under the Global Aero Logistics holding company—name later changed to Global Aviation Holdings. Other airline companies include Miami-based Arrow Air
, which MatlinPatterson has decided to liquidate.
MatlinPatterson had shown interest in Aloha Airlines
[ and later had sought to bid on Alitalia in 2008 prior to Alitalia's acquisition by CAI AirOne. MatlinPatterson relinquished majority shareholder ownership control of Varig Logistica
, in the former cargo arm of Varig, to the Synergy Group controlled by German Efromovich."
In July 2009, MatlinPatterson—which acquired Nortel bonds after the company filed for bankruptcy, becoming one of Nortel's largest bondholders—participated in the auction for Nortel's CDMA and LTE
wireless assets. Ericsson ultimately outbid NokiaSiemens and MatlinPatterson, paying almost double the initial "stalking horse
" bid of $650 million. MatlinPatterson similarly drove up the value of Foamex International by $50 million or almost 50 per cent, when it teamed up with Black Diamond Capital Management to acquire Foamex through a Section 363 credit bid under the U.S. Bankruptcy Code.
Other significant investments include California-based homebuilder Standard Pacific Corp., in which MatlinPatterson purchased a controlling stake in 2008.
MatlinPatterson also led a $1.3 billion investment in Thornburg Mortgage
, a Santa Fe based REIT. MatlinPatterson invested over $500 million in the Company, which later filed for bankruptcy and MatlinPatterson's investment was wiped out.
Between January 2009 and November 2010, MatlinPatterson invested $1 billion to become the controlling shareholder of Flagstar Bancorp of Troy, Michigan
..
In 2010, MatlinPatterson bought a large amount of second lien bank debt of BoGen, a Boston-based IPP. That investment became literally worthless as the company was sold to a strategic. MatlinPatterson faced a similar troubling situation with its investment in Oriental Trading.
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
firm focused on distressed investments
Distressed securities
Distressed securities are securities of companies or government entities that are either already in default, under bankruptcy protection, or in distress and heading toward such a condition. The most common distressed securities are bonds and bank debt...
across a range of industries. Typically the firm seeks to make control investments in the companies in which it invests.
The firm, which is headquartered in Midtown Manhattan
Midtown Manhattan
Midtown Manhattan, or simply Midtown, is an area of Manhattan, New York City home to world-famous commercial zones such as Rockefeller Center, Broadway, and Times Square...
in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
, was founded in 2002 by David Matlin and Mark Patterson
Mark Patterson (investor)
Mark Patterson is a South African born private equity hedge fund venture capitalist of caucasian descent, notable for co-founding the private equity firm MatlinPatterson Global Advisors....
, as a spinout from Credit Suisse First Boston
Credit Suisse First Boston
Credit Suisse First Boston was the former name of the banking firm Credit Suisse.-History:In 1978, Credit Suisse and First Boston Corporation formed a London-based 50-50 investment banking joint venture called the Financière Crédit Suisse-First Boston...
.
The firm has raised approximately $8.9 billion since inception across three funds. In 2007, the firm completed fundraising for its third and largest fund with $5.0 billion of investor commitments. The firm's previous funds raised $2.2 billion (Fund I, 2002) and $1.7 billion (Fund II, 2003), respectively.
History
The firm was founded by David Matlin and Mark PattersonMark Patterson (investor)
Mark Patterson is a South African born private equity hedge fund venture capitalist of caucasian descent, notable for co-founding the private equity firm MatlinPatterson Global Advisors....
, as a spinout from Credit Suisse First Boston
Credit Suisse First Boston
Credit Suisse First Boston was the former name of the banking firm Credit Suisse.-History:In 1978, Credit Suisse and First Boston Corporation formed a London-based 50-50 investment banking joint venture called the Financière Crédit Suisse-First Boston...
. The two had worked together at Credit Suisse
Credit Suisse
The Credit Suisse Group AG is a Swiss multinational financial services company headquartered in Zurich, with more than 250 branches in Switzerland and operations in more than 50 countries.-History:...
and previously at Scully Brothers & Foss. Prior to founding the firm, Matlin was a Managing Director at Credit Suisse
Credit Suisse
The Credit Suisse Group AG is a Swiss multinational financial services company headquartered in Zurich, with more than 250 branches in Switzerland and operations in more than 50 countries.-History:...
, and head of the Distressed Group since its inception in 1994. Patterson, the older of the two founders, had worked in various positions, particularly in Leveraged Finance, at Credit Suisse
Credit Suisse
The Credit Suisse Group AG is a Swiss multinational financial services company headquartered in Zurich, with more than 250 branches in Switzerland and operations in more than 50 countries.-History:...
, Scully Brothers & Foss, Salomon Brothers
Salomon Brothers
Salomon Brothers was a bulge bracket, Wall Street investment bank. Founded in 1910 by three brothers along with a clerk named Ben Levy, it remained a partnership until the early 1980s, when it was acquired by the commodity trading firm Phibro Corporation and then became Salomon Inc. Eventually...
and Bankers Trust
Bankers Trust
Bankers Trust was an historic American banking organization. The bank merged with Alex. Brown & Sons before being acquired by Deutsche Bank in 1998.-History:A consortium of banks created Bankers Trust to perform trust company services for their clients....
.
When the firm raised its first fund in 2002 with $2.2 billion of investor commitments, it did so with more than $450 million of capital from Credit Suisse
Credit Suisse
The Credit Suisse Group AG is a Swiss multinational financial services company headquartered in Zurich, with more than 250 branches in Switzerland and operations in more than 50 countries.-History:...
. Credit Suisse did not invest in the firm's second fund which raised $1.7 billion in 2003, but did invest in the third fund which raised $5.0 billion of investor commitments.
In 2007, MatlinPatterson also raised its first hedge fund
Hedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
, the MatlinPatterson Distressed Opportunities Fund to make non-control investments in distressed securities
Distressed securities
Distressed securities are securities of companies or government entities that are either already in default, under bankruptcy protection, or in distress and heading toward such a condition. The most common distressed securities are bonds and bank debt...
.
Investments
MatlinPatterson has made investments in a variety of industries, ranging from homebuilding, to chemicals, telecommunications, energy and airlines. In 2001, MatlinPatterson became the majority owner of Huntsman Corporation, which at the time was the 5th largest chemicals company world-wide, and later became a public company.The firm was also a significant purchaser of WorldCom bonds. The company later was renamed MCI Worldcom and later more simply to MCI prior to its subsequent acquisition by Verizon.
MatlinPatterson has also made several investments in the energy sector, becoming the largest shareholder of NRG Energy
NRG Energy
NRG Energy, Inc. is an American energy company headquartered in West Windsor Township, New Jersey, near Princeton.-Electrical Power Generation Operations:...
, which was the country’s third largest independent power company, as well as acquiring several power generation facilities in the Southeastern United States and Buenos Aires, Argentina.
MatlinPatterson has made notable investments in the airline industry including ATA Holdings of which "mainline carrier," ATA Airlines
ATA Airlines
ATA Airlines, Inc., formerly known as American Trans Air, was an American low-cost scheduled service and charter airline based in Indianapolis, Indiana. ATA operated scheduled passenger flights throughout the US mainland and Hawaii, as well as military and commercial charter flights around the world...
and "regional carrier," Chicago Express (C8) was a part (but d/b/a ATA Connection), and later acquiring Global Aviation Holdings—North American Airlines
North American Airlines
North American Airlines, Inc. is an American airline with its headquarters in Building 141 on the grounds of John F. Kennedy International Airport in Jamaica, Queens, New York City, USA. Prior to May 2008, it operated scheduled international services from the USA to Africa and Guyana. Today, it...
and World Airways
World Airways
World Airways, Inc. is an American airline headquartered at the HLH Building in Peachtree City, Georgia. For the most part, the company operates non-scheduled services. Its main aircraft and maintenance base is Tampa International Airport.-History:...
under the Global Aero Logistics holding company—name later changed to Global Aviation Holdings. Other airline companies include Miami-based Arrow Air
Arrow Air
Arrow Cargo was an American cargo airline based in Building 712 on the grounds of Miami International Airport in unincorporated Miami-Dade County, Florida, USA. It operated over 90 weekly scheduled cargo flights, and had a strong charter business. Its main base was Miami International Airport...
, which MatlinPatterson has decided to liquidate.
MatlinPatterson had shown interest in Aloha Airlines
Aloha Airlines
Aloha Airlines was an American airline headquartered in Honolulu CDP, City and County of Honolulu, Hawaii, operating from a hub at Honolulu International Airport...
[ and later had sought to bid on Alitalia in 2008 prior to Alitalia's acquisition by CAI AirOne. MatlinPatterson relinquished majority shareholder ownership control of Varig Logistica
Varig Logística
Varig Logística S.A., operating as VarigLog, is a cargo airline, based in Jardim Aeroporto, Campo Belo, São Paulo, Brazil.-History:The airline started operations in September 2000 as a wholly owned subsidiary of Varig and employed 1,345 staff....
, in the former cargo arm of Varig, to the Synergy Group controlled by German Efromovich."
In July 2009, MatlinPatterson—which acquired Nortel bonds after the company filed for bankruptcy, becoming one of Nortel's largest bondholders—participated in the auction for Nortel's CDMA and LTE
3GPP Long Term Evolution
3GPP Long Term Evolution, usually referred to as LTE, is a standard for wireless communication of high-speed data for mobile phones and data terminals. It is based on the GSM/EDGE and UMTS/HSPA network technologies, increasing the capacity and speed using new modulation techniques...
wireless assets. Ericsson ultimately outbid NokiaSiemens and MatlinPatterson, paying almost double the initial "stalking horse
Stalking horse
A stalking horse is a person who tests a concept with someone or mounts a challenge against them on behalf of an anonymous third party. If the idea proves viable and/or popular, the anonymous figure can then declare their interest and advance the concept with little risk of failure...
" bid of $650 million. MatlinPatterson similarly drove up the value of Foamex International by $50 million or almost 50 per cent, when it teamed up with Black Diamond Capital Management to acquire Foamex through a Section 363 credit bid under the U.S. Bankruptcy Code.
Other significant investments include California-based homebuilder Standard Pacific Corp., in which MatlinPatterson purchased a controlling stake in 2008.
MatlinPatterson also led a $1.3 billion investment in Thornburg Mortgage
Thornburg Mortgage
Thornburg Mortgage Inc., , was an American publicly traded corporation headquartered in Santa Fe, New Mexico. Founded in 1993, the company is a real estate investment trust that originates, acquires & manages mortgages, with a specific focus on jumbo and super jumbo adjustable rate mortgages...
, a Santa Fe based REIT. MatlinPatterson invested over $500 million in the Company, which later filed for bankruptcy and MatlinPatterson's investment was wiped out.
Between January 2009 and November 2010, MatlinPatterson invested $1 billion to become the controlling shareholder of Flagstar Bancorp of Troy, Michigan
Troy, Michigan
Troy is a city in Oakland County in the U.S. state of Michigan, and is a suburb of Detroit. The population was 80,980 at the 2010 census, making it the 11th-largest city in Michigan by population, and the largest city in Oakland County...
..
In 2010, MatlinPatterson bought a large amount of second lien bank debt of BoGen, a Boston-based IPP. That investment became literally worthless as the company was sold to a strategic. MatlinPatterson faced a similar troubling situation with its investment in Oriental Trading.
External links
- MatlinPatterson Global Advisers (company website)