Aames Financial Corp. this week named A. Jay Meyerson, the former consumer finance chief at KeyCorp, to lead it back from the brink.

Mr. Meyerson, who was named chief executive officer of the ailing subprime lender on Tuesday, acknowledged in an interview that the turnaround won't be easy.

"Independent home equity companies have really had some serious difficulty, but with Capital Z's investment, we feel Aames is well positioned to turn around," Mr. Meyerson said.

New York-based Capital Z Partners has made a series of investments in the Los Angeles company, essentially taking it over. International investors in the deep-pockets group include Zurich Financial Services and Chase Manhattan Corp.

Mr. Meyerson, 52, was the chief executive and chairman of KeyBank USA, the consumer finance arm of KeyCorp, from 1994 to 1997. He was an independent consultant for a year after that and most recently was a managing director at KPMG's national financial services consulting practice.

Aames was among the subprime lenders that ran into trouble when the market for their securities dried up a year ago. Capital Z Partners pledged $76 million of much-needed cash last December and an additional $25 million in mid-July. The deal, in which control of Aames effectively changed hands to Capital Z, amounted to an out-of-court bankruptcy reorganization.

Last week Capital Z pitched in another $4 million in a $25 million sponsored rights offering. Analysts said that the continued investment into Aames indicates that the turnaround isn't going as planned and would dilute the potential rate of return on Capital Z's investment.

Mani Sadeghi of Capital Z Partners, who has been acting as interim chief executive for Aames since May, said Capital Z stands by its investment and would continue its involvement in managing the firm. Mr. Sadeghi will continue on as a director of the company.

"I have a lot of personal and fiduciary obligation for a lot of investment into the company," Mr. Sadeghi said. "We as a company have something to prove to the marketplace. The saying around our company is that the stock performs when the company performs."

Aames shares have been trading below $1. They were at $1.25 on Wednesday.

Mr. Sadeghi said the company hopes to become cash-flow neutral or even positive by next year.

In August, after a nine month absence, Aames returned to the asset-backed-securities market with a $400 million deal. Mr. Sadeghi said a similar-size securitization is planned for this quarter.

"We find that the market, although choppy and difficult, is still there," Mr. Sadeghi said. For investors in asset-backeds, he said, "the spreads are now phenomenal -- unfortunately, for us as an issuer."

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