HAWTHORNE, NY — Cavalry Investments LLC, one of the nation’s largest acquirers of distressed consumer debt, reported record growth for the fourth quarter and year 2002. The total value of Cavalry’s receivables portfolio, including the aggregate principal balances of loans acquired plus accrued interest, increased to $7.9 billion in 2002, up from $3 billion in 2001.
In the three months ended December 31, the firm acquired six portfolios with aggregate principal balances of $2 billion, compared to $170 million in portfolio acquisitions during the same period last year. Gross collection proceeds, the total collected on accounts Cavalry owns, were $22 million in the fourth quarter of 2002 and $12 million in the comparable period last year.
For the year, Cavalry’s portfolio acquisitions totaled $4 billion in aggregate principal balances, compared to $985 million in 2001. Gross collection proceeds were $70 million in 2002 and $38 million in 2001. The firm now has 425 employees servicing 2.2 million accounts in four offices across the country.
Cavalry recently announced that the firm has retained Salomon Smith Barney to explore a range of strategic and financial alternatives to capitalize on its robust growth.
Economic factors including the sharp rise in corporate bankruptcies, which increased the inventory of non-performing consumer debt portfolios, as well as high consumer default rates, all contributed to Cavalry’s record pace of acquisitions in 2002, said Andrew Zaro, chief executive officer.
“There is a larger supply of distressed portfolios available now. The key to our growth and success is not just buying more debt, but also managing collections on our accounts efficiently and effectively,” Zaro said. “Cavalry has the expertise and the systems and processes in place so that we can realize significant margins as we continue to increase our receivables portfolio.”
About Cavalry Investments LLC
With a $7.9 billion portfolio of receivables, Cavalry Investments is one of the nation’s largest acquirers of non-performing consumer loans. The firm ranks in the top ten of the country’s largest debt buyers, according to Thompson Financial. Cavalry’s client roster includes some of the nation’s largest banks and consumer finance companies, as well as automotive companies, retailers, utilities, telecom and healthcare companies. The firm offers significant expertise, proven collection strategies and a proprietary credit scoring system that pinpoints “recoverable” loans, as well as a national legal network. Cavalry has offices in Hawthorne, New York, Phoenix, Arizona, Tulsa, Okla., and St. Paul, Minn.
