When Chinese distressed debt investor Sheng Li goes to inspect property pledged as collateral for a bad loan, he never knows what he may encounter.
On a sweltering summer day at a rundown commercial development market in the outer suburbs of Shanghai, he finds a shirtless man arranging rolls of wallpaper for shipment. The bare concrete floors of the residential apartment on the upper floor are strewn with rubbish.
“Sometimes I’ll hear my colleagues say: ‘This is an ugly place. We shouldn’t buy it.’ But that’s the wrong approach. All that matters is the difference between the buy and sell prices. It’s not like I’m going to live here,” says Mr Sheng, executive partner at Bald Eagle Asset Management, which manages a portfolio of about Rmb1bn ($151m) in assets.