Recognize

The Stornoway investment team often finds the most attractive investment opportunities in troubled companies left for dead by other more traditional investors. Existing investors who have been burned by poor company performance have enormous skepticism as to the survival of the company and will often sell at sharply discounted prices to exit the position. The key to identifying these opportunities lies in recognizing the potential stakeholder value that can be created and the risks that can be removed through a corporate restructuring. In order to recognize this value and invest with conviction, Stornoway conducts extensive analysis and due diligence to identify the causes of the company's problems, the associated risks, and the path to revitalization that will unlock this value and generate attractive returns for the Fund.
Next: Reorganize

Reorganize

Often, before a troubled company can be put back on the path to prosperity it must reorganize its affairs in order to right-size its operations and/or capital structure. During this process, the Stornoway team will roll up their sleeves to play an active role, partnering with the company and/or fellow creditors as appropriate. The Stornoway team are experts in corporate reorganizations - contributing their knowledge, experience, and network to the process allows the Fund to invest when and where others are unable or unwilling, and profit from the value created through a successful reorganization. At this stage, Stornoway may inject further capital directly into the company and/or convert its debt into equity of the restructured company. At the end of the restructuring process, creditors, shareholders and management's interests become aligned and focused on revitalizing the company.
Next: Revitalize

Revitalize

While a successful corporate reorganization is a key milestone along the path to recovery, the journey to a complete revitalization does not end there. Armed with a more stable capital structure, more efficient operations, and a new or reinvigorated management team, the company can once again focus on its core business and on creating value for stakeholders rather than fighting fires. As this renewed focus takes hold, signs of revitalization emerge – increased revenues, new contracts, reduced costs and improving margins, increasing profitability, an improved financial flexibility which allow the company to thrive. These are the true signs of value creation, and Stornoway will remain invested and engaged as these signs unfold.
Next: Crystallize

Crystallize

When a company is again on solid footing, and the benefits of the reorganization and signs of revitalization become clear, traditional investors begin to take notice and the market prices of its securities will begin to reflect the value created and the de-risking of the company achieved through the reorganization/revitalization process. At this time, Stornoway will look to crystalize its position, locking in gains and freeing up liquidity so that the process can start anew.
Next: Recognize