Peter Troob – Monkey Business in High Yield (Capital Allocators, EP.59)

Peter Troob is the co-Founder and CIO of Troob Capital Management, an opportunistic investor and family office with particular expertise in distressed situations. Prior to starting TCM in 2002, Peter spent six years focusing on distressed debt investing at Contrarian Capital and Everest Capital. He started his career as an investment banker, and after his tenure in self-proclaimed purgatory, he co-authored the entertaining book 'Monkey Business: Swinging Through the Wall Street Jungle."

Our conversation begins with life as an investment banking analyst, and turns to competing with large distressed funds, the frothy high yield market, trickery in the CDS market, high yield ETFs, idiosyncratic opportunities, diversifying family assets, managing teams, and learning from the dinner table.

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Show Notes

2:09 – Start of his career

3:02 – Peter's book Monkey Business

3:47 – The life of an investment banker

4:22 – Decision to leave the bank

4:50 – His experience at a hedge fund

5:27 – Some of his early mistakes

6:15 – The dynamics of distressed debt investing

8:05 – The appropriate size for a distressed fund

11:28 – What should your expectations be if you invest in a large fund

13:12 – Short credit thesis

18:00 – Impact of private equity owned companies on defaults

19:49 – Shenanigans we are seeing in the CDS market

24:36 – Concerns about high yield ETFs

26:42 – Investing family capital

29:16 – Sourcing idiosyncratic deals

32:49 – What Peter has learned about managing a team

35:43 – Hiring millennials

36:22 – Lessons from investing mistakes

43:05 – What is it like working with family

45:58 – Closing questions

49:56 - Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts