| Type | Private |
|---|---|
| Industry | Private equity |
| Founded | 2002 |
| Founder(s) | David J. Matlin, Mark R. Patterson |
| Headquarters | New York, New York, United States |
| Products | Growth capital |
| Total assets | $8.9 billion |
| Employees | under 40 |
| Website | www.matlinpatterson.com |
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,[1] 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.[2] The firm's previous funds raised $2.2 billion (Fund I, 2002) and $1.7 billion (Fund II, 2003), respectively.
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The firm was founded by David Matlin [3] and Mark Patterson, 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.[2][4]
In 2007, MatlinPatterson also raised its first hedge fund, the MatlinPatterson Distressed Opportunities Fund to make non-control investments in distressed securities.[5]
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[6], which at the time was the 5th largest chemicals company world-wide, and later became a public company[7].
The firm was also a significant purchaser of WorldCom bonds[8]. The company later was renamed MCI Worldcom and later more simply to MCI prior to its subsequent acquisition by Verizon.[9]
MatlinPatterson has also made several investments in the energy sector, becoming the largest shareholder of NRG Energy[10], which was the country’s third largest independent power company, as well as acquiring several power generation facilities in the Southeastern United States[11] 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[[12] and later had sought to bid on Alitalia[13] 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."[14]
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.[15] 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.[16]
Other significant investments include California-based homebuilder Standard Pacific Corp., in which MatlinPatterson purchased a controlling stake in 2008.[17]
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.[18][19].
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.
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