By Sarah Wood
Even as many hedge fund players continue to profit from
their early bets against the subprime mortgage sector, the
industry is again demonstrating that its massive growth hasn't
robbed it of its speed in exploiting new opportunities. Now,
the focus is on a very different credit play: long bets on the
hundreds of billions of dollars of leveraged loans and
high-yield debt awaiting buyers since the seize-up of the
securitized debt markets earlier this year.
You'd have to have been in the deepest wilderness - with no
BlackBerry service - since August to not have heard about the
special short-term vehicles that are being set up to take
advantage of the upwards of $300 billion of buyout-related
loans now stranded on bank balance sheets.
The thinking behind these vehicles is simple: There is a
one-off chance over the next few months to buy huge amounts of
quality assets at...