Distressed Debt Investors Club Update

I received a number of comments and congrats from readers on the Distressed Debt Investors Club mention in Institutional Investor. As always, I am humbled and very thankful for such a wonderful group of readers. With that said, I received a number of emails from potential applicants to the site and wanted to answer these, in more or less an essay format, to the larger audience versus responding to individual emails.

For reference, here is the Distressed Debt Investors Club home page.

I started planning the Distressed Debt Investors Club in late summer of last year. In my opinion, there was lacking a forum for credit / high yield / distressed investors to talk and pitch ideas. While there are two very well known sites for pitching equity / value ideas, the amount of ideas speaking to distressed investors was limited at best. So where are we now?

As most people know, I am capping membership at 250 members. In my opinion that number balances well a high quality membership base but also, with a requirement of investment ideas, brings in substantial flow of ideas to the site. Right now we sit at a little over 150 members and nearly 3000 guests. We could have been at 250 members right out of the gates, but I have done my best to be as judicious as possible with the application process.

The biggest question / concern I get from potential applicants is ones related to compliance. Many high profile hedge funds / investment shops strictly forbid pitching investment ideas in a forum similar to the DDIC. If you look at the guest list on the site, you will see 95% of the major distressed / event driven hedge funds on there. With that said, as all the members of the DDIC know, user's identities are only known by me and our privacy policy strictly states that user's identities will not be released.

The quality of ideas is spectacular. Would you want access to over 150 of the best distressed / event driven analyst's ideas on a weekly basis? That is what the DDIC provides. I need to make an actual study of it, but I would say 90% of the ideas (both long and short) have been winners. Some have been absolute home runs.

Right now, as most analyst, portfolio managers, and traders know, distressed is somewhat picked over. Unless you are playing something like LBHI's subcon claim, or Capmark's settlement play, there really are not a lot of non-confi distressed names out there (we have a strict policy of only non-confi names on the site). With that said, I encourage all those interested in applying to pitch an equity or credit short to the site - a market I feel that is RIPE for out performance right now.

Many people ask me why I do not post more on this site - I have a little over 200 posts on this blog, but have just as many posts on the DDIC forum. For one, I can actually post there from work and two, I find the discussion fascinating on the forum. For example, I can ask users what their thoughts are on XYZ situation and get a number of well thought out responses that can help shape my investment opinion.

Overall, I could not be happier with the progress of the site. The membership quality has exceeded my wildest expectations and I am very grateful to even be part of such a wonderful community.

I encourage all those interested in applying either as a member or as a guest to visit the site. If you have question, my email is hunter [at] distressed-debt-investing.com.