Lubert: "A very large, fear-based problem"

"You can make money in any cycle. You just have to understand where you are in the cycle," Ira Lubert, cofounder of Lubert Adler real estate investors and 7 other funds in $12 billion-asset Independence Capital Partners, told investors at the Association for Corporate Growth's Philadelphia meeting today.
  Well, sure, timing's important. And the graying lawyers and bankers among the crowd know that lean days, or years, follow fat ones.
  But the current downturn, Lubert said, has "one distinct feature" he hadn't seen before: "There is a very large, fear-based problem. Fear makes people do things that just aren't normal." Such as discounting high-rated municipal bonds, raising loan prices as Fed rates fall, and declining to refinance loans for solvent borrowers.
  For Lubert, fear spells opportunity. "If you have capital, you can take advantage of that irrationality", buying loans and companies on the cheap, Lubert said.
  And that's the plan for several of the newly-recapitalized funds in Lubert's stable, which, besides Luber Adler, includes LLR Partners (private equity), LEM Mezzanine, Versa Capital (distresed companies), Rubenstein Partners (real estate), LBC Credit Partners (distressed loans), Patriot Capital Partners (small banks), and Quaker BioVentures (which, as a biotech fund, is unusually protected from the current credit crunch.)