Ep37: Odilon Costa – The Complexity of Managing Distressed Debt Properties

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Guest profile

Odilon Costa is a Sr. Emerging Market Research Analyst with the emphasis in commercial real estate and fixed income. He started his career working at large investment banks, such as ABN Amro, BNP Paribas, and HSBC, in Brazil and France. His activities are currently focused on providing strategic services for some research platforms, such as REDD Intelligence and Eleven Financial, and asset managers, covering high yield and distressed debt. He holds a Ph.D. in Finance from FGV at Sao Paulo School of Business and was a visiting researcher at the University of Cambridge. He has published several papers in the field of real estate finance and investments.

In this episode, Odilon talks about the pros and cons of distressed debts investing, how lucrative and promising this investing is, the complexities of restructuring that are involved in this type of investment, and the challenges involved in getting accurate information about it which limits the number of investors who can adequately invest in them.

Listen and learn from this expert as he will tell you more about the highs and lows of purchasing distressed debt.


“Regardless of how much you study a deal, you can’t just underestimate the risks.”

Odilon Costa


Topics Covered:

0:38 – Odilon Costa’s background as an investment professional

2:41 – Recounting one of the investments he acquired  and how it turns out  bad and the backstory of how he was convinced to venture into the investment

4:00 – Sighting the conflicts that made his investment fall short

6:26 – Strategies that he carried out to improve the returns of the investment as well as the risks management that they did

8:34 – A rundown of the lessons he gained from his experience

9:13 – A sensible closing advice from Odilon Costa: “Regardless of how much you study a deal, you can’t just underestimate the risks.”

Main Takeaways:

Lesson 1: “You really can’t underestimate income risks. So, if you’re going to close a deal, if it’s a distressed deal, you need to understand how incomes are going to come out of that deal.Odilon Costa

Lesson 2: “You can’t let confidence affect you. You have to be cold and manage risks in a way that they do not affect the way you’ll see the deal.” –  Odilon Costa

Lesson 3: “Finance adds no value. It’s the entrepreneurial aspect that adds value”  – Andrew Stotz

Lesson 4: “The income risk is really about how we want to stay focused on our business, products, and services. Finance oftentimes manipulates the liability side of the balance sheet.” –  Andrew Stotz

Lesson 6: “The job of finance ultimately is to support the entrepreneur to do their business better, faster, stronger, cheaper. What we’re doing is supporting the allocation of capital to the people that are making the products and services that people want.” – Andrew Stotz

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About the show & host, Andrew Stotz

Welcome to My Worst Investment Ever podcast hosted by Your Worst Podcast Host, Andrew Stotz, where you will hear stories of loss to keep you winning. In our community, we know that to win in investing you must take the risk, but to win big, you’ve got to reduce it.

Your Worst Podcast Host, Andrew Stotz, Ph.D., CFA, is also the CEO of A. Stotz Investment Research and A. Stotz Academy, which helps people create, grow, measure, and protect their wealth.

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