EXCERPT FROM ARTICLE, Blackstone, TPG Face New Pressure on Puerto Rico Loans

For private fund managers, a natural disaster presents a clear choice to not compound the problems of people impacted by the event – and not an instance to check investors’ temperature before acting, says Bruce Frumerman, CEO at Frumerman & Nemeth, a consultant on communications, sales, and marketing.

“With a problem where it’s so obvious who is getting hurt, you draw a line,” he says. “You need to be prepared and go to your investor base first.”

...Fund managers facing such questions should consider taking a loss, but craft a detailed explanatory thesis for investors – clearly outlining the original expectations, how the hurricanes upended them, how the investment committee reviewed the situation, and its final decision, Frumerman says.

It’s worse to face public reprimand from investors on pursuing foreclosures than it would be to field calls from investors grumbling about a loss. “They’re not going to criticize you publicly,” he says.

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