Playing the waiting game
Mon Feb 2, 2009
With copious restructurings to come, managers of distressed funds fret over timing the bottom - and securing the capital they need
With copious restructurings to come, managers of distressed
funds fret over timing the bottom - and securing the capital
By Carolyn Sargent
With a global recession of historic proportions looming,
times have probably never been better for fund managers who
trade distressed assets. Global demand for goods and services
is collapsing, capital for refinancing has dried up and
corporate default rates are still low - which means many more
bankruptcies are to come.
Portfolio managers of distressed funds are excited about a
boom, especially since such a long cycle of easy credit and
economic prosperity made their job so difficult in recent
years. Many strayed from their traditional distressed strategy,
veering into private equity or even distressed equities, often
with dire consequences.
Maybe that's one reason they're a bit nervous now.
Opportunities may be more bountiful, but so too are the
potential pitfalls. With the future so murky, many investors
ISSN: 2151-1845 / CDC10004H
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