REFILE-Ex-Deutsche Bank distressed debt stars launch new firm

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HONG KONG Oct 8 (Reuters) - Deutsche Bank (DBKGn.DE) veterans Michel Lowy and Soo Cheon Lee on Thursday launched a boutique investment bank, SC Lowy, which will specialise in distressed and illiquid investments in Asia.

Distressed debt, which came under the spotlight amid the global economic slowdown, is estimated as an over $100 billion opportunity with high-yield bonds accounting for nearly a fifth.

"It's actually contrary to what people think. When the entire economy recovers that is when there are better opportunities for us," said Lowy who began working in the then-fledgling distressed debt niche in Asia the 1990s. "When you are at the bottom of the cycle the commercial banks can't afford to sell troubled assets; they can't even focus on portfolio management."

Lowy and Lee led Deutsche Bank's Asian distressed products group until March 2009 when they broke away to start their own 14-member outfit. Following the duo's departure, four other senior Deutsche bankers moved to Pacific Alliance Group (PAG), an Asia-focused alternative investment manager, in September to expand its distressed asset investment team.

SC Lowy, which is headquartered in Hong Kong, will set up ofices in Japan and Australia, its focus markets over the short term.

Lowy said the his company was looking for real estate-related opportunities, leveraged buyouts in Australia, while scouting around for portfolio non-performing loans (NPLs) and troubled consumer finance assets in Japan.

"Six months later the opportunities could be in China, India and Indonesia," said Lowy.

SC Lowy also aims to expand its operations to to other emerging markets and Europe in the future.