Ben is a pioneer in China’s distressed debt markets, having worked on the country’s first non-performing loan (“NPL”), as well as the first foreign-invested NPL deal 20 years ago. Since then, he has managed roughly $2 billion in Chinese distressed debt and special situations investments — and as you’ll hear in this conversation, never lost money on an NPL.
I encourage you to have your pen and paper at hand because you are going to want to take notes — this conversation is both broad and deep.
In our discussion, Ben provides a clear overview of China’s credit markets — which are the second-largest in the world — and lays out the ways that foreign investors can access them, including the spaces where ShoreVest plays.
We discuss how the market has evolved over the last two decades. This includes the role of the country’s Asset Management Companies (“AMCs”) in the NPL market, the treatment of creditor rights, and his experience working through the Chinese legal & bankruptcy system to attain enforcements.
Ben shares why he thinks there are so few international investors in China’s distressed debt markets, the ways that ShoreVest exits its investments, and how the firm converts and repatriates exit proceeds to U.S. dollar investors.
We also get into developments with Evergrande and the country’s overleveraged property developers and the risks that keep Ben up at night — among other topics.
I hope you enjoy this conversation.
This podcast was recorded in July 2022.
Learn more about ShoreVest Partners.
The World Economic Forum index on investor protections referenced in the discussion is available freely at this link.
PwC’s “The Chinese NPL market in 2020” report is available here.
Ben’s book recommendation: Dinny McMahon’s "The Great Wall of Debt".
Mike's book recommendation on historical context:
Loren Brandt & Thomas Rawski, "China's Great Economic Transformation".
Music credit: Daniel Allan, “Too Close” released on Sound. You can learn more about Daniel’s community-owned DAO that underwrote his latest EP here.
(Disclosure: In addition to the “Too Close” NFT, Portico’s founder Michael Casey owns $OVERSTIM tokens, as well as many other music NFTs; his Sound collector profile is available here).