CompuCredit Down-Cycle Play: Buy Distressed Receivables

CompuCredit Corp., best known for marketing credit cards to subprime consumers, has been shifting its emphasis toward debt recovery, which it says is a better bet in an unstable economy.

Late last year it set up a subsidiary, Jefferson Capital Systems LLC, to buy defaulted accounts and the unit is already a significant contributor to CompuCredit's bottom line. Jefferson Capital has picked up some $1.8 billion in receivables, some for prices in the area of a penny on the dollar.

Most of the purchases, and the income, are from assets acquired from CompuCredit's securitized trust portfolios but that may not always be the case.

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