Undeterred by his utter destruction of Tribune Company, Sam Zell is now poised to exploit the nation's economic problems through a $625 million fund he has put together to buy distressed securities backed in part by commercial real estate.
Investors expect that billions of dollars in maturing debt will trigger a wave of bank foreclosures and loan sales, Bloomberg reports.
When that happens, Zell's fund will be ready to pounce.
"[This fund] is a harbinger of what is to come," John Goff, who co-founded Crescent Real Estate Equities Co. with billionaire Richard Rainwater, told Bloomberg. "A lot of loans are coming due, and there are going to be a whole host of opportunities."
Zell's success in buying distressed assets - Tribune Company notwithstanding - is what earned him the nickname "The Grave Dancer."
Given his performance with Tribune Company, "The Grave Robber" might be more apropos. But give Zell credit: he's going back to his roots.
As a so-called vulture investor, Zell hopes to profit by purchasing debt for pennies on the dollar. Then he'll negotiate for higher prices or equity stakes as troubled companies are forced to reorganize in bankruptcy. Sort of like the Tribune Company is doing now.
Only Zell will be on the other end.
“On the debt side, the opportunity is extraordinary,” Zell told a group of investment types, Bloomberg reports.
And when it comes to debt, Zell would know.