Distressed continues to be a killer strategy, driven by fund flows desperate for yield and a few select deals that played out to plan. In August, median returns were 1.44%, bringing the year-to-date total to 6%, according to research by Absolute Return. As one investor put it, "Why wouldn't you position yourself on credit, especially distressed, when you know there is a bid?"
Davidson Kempner Distressed Opportunities International fund had a terrific month, posting a gain of 4.94% for a total of 11.2% since its April 1 inception. John A. Levin & Co.'s Levco Debt Opportunities Fund gained about