Andrew Allentuck

Friday, November 3, 2000

The Vulture Investors
By Hilary Rosenberg
John Wiley & Sons, 404 pages

Vulture investors descend on companies near bankruptcy and try to buy their assets at a fraction of their worth. A little known side of capital markets, these bargain basement opportunities offer huge risks in case the firms really are as worthless as markets say and corresponding gains if there is value in firms others don't recognize.

Hilary Rosenberg, who writes for the New York Times, Barron's and other top US business publications, brings light and insight into this investing niche. Running through the pages are colourful descriptions of corporate raiders like Leon Black, Sam Zell, and the objects of their attentions, including Donald Trump and Merv Griffin. Her work is based on abundant research. Vulture investors, she notes, need superb information and large amounts of capital.

They must have lawyers and accountants able to evaluate corporate situations. Getting into the league of top flight vulture takes connections with major investment banks, access to technical advice on the products of companies they are considering buying, and the kind of courage that goes with a willingness to bet their firms on takeover targets.

Vulture investors have to go head to head with desperate capitalists who, like Donald Trump, having overspent on casinos in the late 1980s, are determined to save their assets. Ms. Rosenberg's story is compelling, her lessons valuable. For the investor who considers buying assets other won't touch, her book is essential reading.