Top of Mind: Strengthening Turnaround Tactics

FROM BUSINESS FINANCE

... hedge funds and private-equity firms that took big positions in cash-poor companies are leading the pack in the effort to ward off financial woes as they seek to boost performance at the first sign of trouble. According to the Lipper HedgeWorld & Schwartz Cooper 2007 insolvency survey, nearly one in three hedge funds has consulted a turnaround or workout professional regarding positions in its portfolio.

And in turnaround situations, timing is critical. "The key is getting the turnaround firm in early," says Harlan Platt, a professor at the College of Business Administration, Northeastern University. "When a person is sick, they need to get to the doctor's office or hospital quickly. What holds them back is either the feeling that things will get better on their own or that other firms in the same industry are facing similar problems, so they must be doing OK."

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