By Hillary Canada
Mark Patterson, co-founder of distressed investor
MatlinPatterson Global Advisers, is stepping down from day-to-day
operations of the business he co-founded nearly two decades ago,
according to a letter to employees viewed by Dow Jones.
Mr. Patterson will retire from his position as chairman and
chief executive of MatlinPatterson's asset-management division at
the end of the year. He will continue to serve as nonexecutive
chairman of the division, and plans to spend more time focused on
his role on the board of Jazz at Lincoln Center in New York.
Co-founder and Chief Executive David Matlin and Managing Partner
Peter Schoels will take the helm of the asset-management business.
Mr. Patterson helped form the firm's asset-management arm in 2010
to expand MatlinPatterson's investments beyond distressed debt to
include other strategies such as credit trading, securitized credit
and senior credit.
A veteran of Salomon Brothers and Bankers Trust who spends his
spare time driving race cars and playing jazz guitar, Mr. Patterson
also was influential in orchestrating the sale of a minority stake
in MatlinPatterson Asset Management to Swiss insurer Allied World
Assurance Co. Holdings in 2012.
The move comes after a tumultuous few years for MatlinPatterson,
a pioneer in the distressed investing space. As the firm sought to
diversify its credit strategies in 2010, its private-equity
business suffered from some soured investments, including Global
Aviation Holdings Inc. and Premium Protein Products LLC, which both
slipped into bankruptcy.
Operating initially as a division of Credit Suisse First Boston,
MatlinPatterson Global Advisers scaled up quickly. After spinning
out from Credit Suisse, the firm closed on $2.2 billion for a first
control-oriented distressed debt fund in 2002, followed up by a
$1.65 billion pool in 2004 and a $5 billion vehicle, which closed
in 2007.
That left the firm well capitalized when Lehman Brothers
Holdings Inc. collapsed and the housing market went into a
tailspin. It moved straight into the mayhem with investments in
residential builder Standard Pacific Homes and Flagstar Bank, both
of which have stabilized.
In addition to providing investment opportunities, the global
financial crisis also opened up recruiting opportunities, which
allowed Mr. Patterson to expand the asset-management business.
MatlinPatterson Global Advisers is looking "to clear its plate a
bit" before returning to the market to raise another
control-oriented fund, Mr. Matlin said, adding that the firm "dug
itself a bit of a hole early in the fund."
MatlinPatterson Global Opportunities Partners III LP, which
closed in 2007, was generating a 7.46% net internal rate of return
as of March 31, according to data published by the California State
Teachers' Retirement System.
Mr. Matlin said the firm let its investors know two years ago
that Mr. Patterson was transitioning from day-to-day management of
the private-equity side to focus full time on the asset-management
business.
MatlinPatterson is focused on scaling up its asset-management
platform, which on Mr. Patterson's watch grew to $3.5 billion from
$800 million over the past two years.
"We've built a strong team and I'm proud of that," said Mr.
Patterson. "Now's the right time to pass the baton."
Write to Hillary Canada at hillary.canada@wsj.com
Access Investor Kit for Credit Suisse Group AG
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=CH0012138530
Access Investor Kit for Credit Suisse Group AG
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US2254011081
Subscribe to WSJ: http://online.wsj.com?mod=djnwires