SPECIAL SITUATIONS

Capstone prides itself on its ability to identify unique investment ideas through deep-dive policy research.  Capstone's analysts spend hours sifting through comment letters, proposed rules, agency publications and legislative drafts, leading to ideas and conclusions others might have missed. Analysts also attend public hearings in Washington, DC, participate in conference calls, visit municipal bond issuers in Puerto Rico, US Virgin Islands and Illinois, attend court hearings, and attend the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA) oversight board meetings. Capstone regularly meets with policymakers at the state and federal level throughout our research process. The output of this process is often a differentiated investment idea with unique distressed or event-driven features.

 

Capstone analysts pay special attention to distressed credit and event-driven situations during the idea generation process. What makes us different is our focus on finding and exploring non-traditional ideas and our willingness to engage in in-depth analysis and get deep "in the weeds" on government policy. We produce differentiated and comprehensive policy research focused on creating actionable investment ideas for our clients as well as context around policy developments and trends. In addition, we provide strategic advice and regulatory due diligence for our clients focused on transactions in heavily regulated industries.

 

Our philosophy is based on the idea that good investment themes come from being masters of policy details. Through our ongoing coverage of non-traditional ideas, we have built strong relationships with current senior officials in government, state legislators, financial advisory firms as well as economists and members of the business community. Many of these relationships go back years, and our continued dialogue with these individuals has allowed us to more closely track volatile situations.

 

Distressed Credit:

  • Distressed Municipal Debt: Puerto Rico, Detroit, Illinois
  • TXU/Energy Future Holdings Restructuring
  • Federal Energy Regulatory Commission (FERC) Pipeline Decisions
  • Westinghouse
  • Coal Mining Companies
  • Pension Related Issues
  • Gaming

Event-Driven Ideas:

  • Tax Inversions and Tax Reform
  • Real Estate Investment Trust (REIT) Conversions
  • Master Limited Partnership (MLP) Conversions/Dropdowns
  • Merger Arbitrage

Regulatory Ideas:

  • FCC Merger Reviews
  • Federal Trade Commission (FTC)/ Department of Justice (DOJ) Anti-Trust Related Matters
  • Trucking and Transportation
  • Product Liability Claims
  • For-Profit Education