Marathon's Special Opportunities business includes a high level of focus and commitment to High Yield Bonds, Bank Debt, Distressed Securities and Special Situations in the U.S. and other major regions of the world. The core strategy of the Special Opportunities business is to purchase undervalued, illiquid or complex securities either outright or against a short position that is deemed overvalued or a suitable hedge. The Special Opportunities business utilizes its expertise to construct a diversified portfolio of investments in companies that provide some balance in the event of a significant sell-off in the market.

Special opportunities include:

• Corporate entities entering/exiting bankruptcy, default, restructuring or re-capitalization events, liquidity shortfalls, breach of covenants or adverse business conditions;
• Corporate “Turn Around” stories requiring additional capital raise, establishment of funding facilities and asset sales;
• Securities trading at deep discounts with large upside potential;
• Pricing disparities between similar or related securities issued by the same or related company, holding company or subsidiary;
• Capital Structure Arbitrage transactions that include the purchase and corresponding short of undervalued and overvalued securities that are related or similar in certain regards;
• Outright short positions to capitalize on expected price declines in securities deemed to be overvalued due to credit downgrade, earnings decline, covenant violation, trigger events; and
• Situational trading arising from volatility, fast moving information and technical conditions.

The focus of the Special Opportunities business often involves “off the radar screen” investments that require active investment management to build relationships with a company's idea generation platform that ultimately aid in identifying undervalued situations across a broad range of asset categories and markets.