LSE Ventures wades into distressed debt investin

For years, Pakistan’s market for bad loans has been a paradox hiding in plain sight: everyone knows it is big, everyone knows it clogs the system, and yet very little of it actually trades in a way that creates transparent prices – and, crucially, incentives to fix broken companies rather than simply warehouse their debt.

Now a small listed player is trying to make that market a little more real.

LSE Ventures has announced it is launching a “distressed debt investing” segment after receiving the requisite approval from the Securities and Exchange Commission of Pakistan, describing the initiative as a step that could become “a major contributor” to the company’s bottom line over time. The company said it has already begun discussions with financial institutions and other banking entities for the acquisition of distressed assets and the restructuring of their portfolios – language that, translated from stock-exchange filing into everyday English, means it wants to buy problem exposures at a discount and then try to get paid by doing the hard work banks would rather avoid.