As the public in Europe longs for a lifting of the lockdowns we need to turn our eye to the many businesses that have been shut for months. Retailers, hospitality, travel operators have run down their cash reserves, and face an acute crisis. Many self-employed and entrepreneurs are now struggling with their financial obligations. Banks will re-assess large loan books that emerge from payment holidays and approach investors in distressed debt. A recovery lies ahead, but so does a reckoning of much debt that cannot be repaid.
Non-performing loans (NPLs), insolvencies and business restructuring are the regular features of renewal in the market economy. The inevitable debt reduction also presents plenty of opportunity where sound businesses and innovative entrepreneurs are offered a fresh start, once capital is re-deployed.
NPL management and investment requires skills that are rarely invested in when times are good, though such skills will now be in demand in the recovery. Financial firms, investors and their advisors and servicing firms will need to quickly build expertise, staff capacity and networks for the coming phase of debt resolution. Large pools of capital are waiting to be deployed in distressed situations, and banks and their clients will need to engage with investors in innovative workout solutions. The past crisis has taught us that unsustainable debt should not linger on balance sheets, and regulators will keep a close eye on the process.
Together with the team in FS Executive Education we are thrilled to design a new course, open to registrations today, starting on March 1st: the Certified Expert in NPL Management and Investment.
Our vision is to equip a new cohort of restructuring professionals with a valuable set of skills for the coming recovery: adept in judging the distressed portfolios and designing the right solutions, but also mindful of the borrower’s perspective, the economic ramifications of debt distress, and of the context in law and regulation. All actors in this field will need to combine financial acumen with responsible business practices.
The innovative course design will combine 10 online lectures accompanied by a series of case studies and quantitative exercises. There will be extensive evidence of restructuring cases and regulation from Europe and emerging markets. We expect there is much to learn from both regions that can be relevant elsewhere. Loan sales and securitisations are for instance an innovative tool that will present new opportunities for lenders, investors, and their servicers.
But there is also an agenda in building networks and sharing experience among professionals in the field. An optional series of eight live sessions will bring some leading practitioners to the Frankfurt School. Restructuring advisors, law firms and regulators and development practitioners will present their experience – and in turn learn from the course participants.
At the end of the course, participants will be fluent in engaging with supervisors, other insolvency professionals and with investors in complex situations involving distressed debt – and chart the way towards a recovery.