High-End Repo Men Hunt Down Jets, Yachts
BOSTON (TheStreet) -- Among businesses booming in the tail end of the deepest recession since the 1930s: high-end repo men.
While most people in the repossession business work the streets for BMWs and Porsches whose owners have fallen behind on payments, Ken Cage, president of operations at Orlando, Fla.-based International Recovery & Remarketing Group, specializes in the more expensive bounty of yachts, private jets, RVs and construction equipment.
Cage logged more than 20 years in the banking and collections industry with such firms such as JPMorgan (JPM) and DaimlerChrysler Financial Services. He became a repo man after he realized he wasn't cut out for life in a cubicle.
Working with childhood friend Bob Weeks as a business partner, Cage began looking for a new business venture in 2004. After a 13-month search, the duo decided that a repossession firm, with its focus on high-value asset recoveries, was an ideal fit. They purchased it.The timing seemed perfect. International Recovery & Remarketing Group's new owners had time to refine its business model -- and build its banking, financial and legal clientele -- ahead of the economic crisis that began in late 2007. During the peak of the recession, the firm's demand for services increased seven-fold. The bonanza continued into 2009, when Cage and Weeks helped repossess almost 350 planes. "We stared going crazy at the beginning of 2008," Cage says, declining to provide revenue figures. "It wasn't just the number of cases, even though those went up significantly. What we really started noticing was the value of the assets. We looked and said, 'These boats are getting bigger.' In 2006 and 2007, the average unit was about $40,000. What we were seeing was a glut of $300,000 and $400,000 units coming in. I was picking up $200,000 boats like they were nothing." In one week-long stretch, International Recovery & Remarketing Group was contracted to repossess three helicopters, valued at $3 million, seize an entire warehouse and go after a $5 million jet. Cage describes his business as a "grassroots indicator" of the overall economy. In the second quarter of 2008, nearly three out of four jobs involved delinquent owners in the real estate industry. His assessment of the economy in 2010, after a spate of fits and starts? "It is a little bit better in that we don't have as many cases," he says. "But I don't think we are through the woods yet -- not even close. We keep getting new people who are calling, and they are all big-ticket items."
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