To delve into the distressed restructuring and M&A market amid the current investment landscape and empower enterprises with market insights, on the afternoon of November 16, the Jimei TOP Financial Empowerment Research Institute partnered with DCL Investments—a leading private equity firm in this sector—to host the “TOP Lecture Hall: Contrarian Investing – Distressed Restructuring & M&A Salon.” This event was part of the Talent Station Joint Action Service Month, guided by the Jimei District Finance Bureau and Jimei District Talent Office, with strategic support from the Jimei Financial Affairs Center and Xiamen Jimei Industrial Investment Group Co., Ltd.
During economic transitions, restructuring and M&A activities focused on revitalizing existing assets and optimizing structures have garnered increasing attention from investors and industrial players, contrasting with traditional pro-cyclical growth investing. This period often yields underperforming assets distressed by liquidity or operational inefficiencies, making acquisitions in this space a rare investment bright spot worthy of exploration.
The event featured a keynote presentation by Ms. Zheng Hualing, Founder and Chairwoman of DCL Investments, to dozens of corporate and institutional representatives. Drawing on her extensive experience in distressed corporate restructuring, M&A, and disposition, Ms. Zheng provided a comprehensive analysis of the sector’s current landscape and challenges.
Ms. Zheng first contextualized the market environment: Official data indicates that non-performing asset (NPA) disposals in the banking sector exceeded RMB 3 trillion annually from 2020–2022, surpassing pre-pandemic levels. Against this backdrop of ample distressed asset supply, the window for restructuring and M&A investments has widened.
She then detailed the evolution of distressed asset investment strategies, analyzing critical success factors and outlining three primary asset-sourcing channels and core investment focuses employed by top institutions. Unlike passive financial investments, distressed restructuring and M&A demand an end-to-end, multidimensional ecosystem where active management capabilities are paramount—including flaw remediation, value restoration, and phased operational enhancements.
Ms. Zheng further highlighted compelling opportunities, such as participating in the restructuring of high-quality bankrupt enterprises and targeted asset acquisitions driven by industrial demand. She also addressed challenges facing investors in this space. Compared to traditional NPL portfolio investing (Model 1.0), the sector’s business model has evolved toward restructuring premium single assets (Model 2.0) and corporate turnarounds with distressed upside potential (Model 3.0). Well-capitalized institutions with integrated multidisciplinary teams stand to capture significant market opportunities.
Concluding her presentation, Ms. Zheng shared three restructuring and M&A case studies: Acquisition of a scarce industrial park project; Value enhancement of a premium serviced apartment asset; Bankruptcy restructuring of a shipping logistics niche leader. These cases demonstrated DCL’s expertise as a sector leader, showcasing its capabilities in deal sourcing, asset operations, and industrial investment banking, providing the audience with tangible insights into the strategy.
The salon concluded with a spirited Q&A session, where attendees engaged in deep discussions with Ms. Zheng on the sector’s outlook. The event concluded successfully as evening fell.