Distressed - Tough times, but some prosper


October was a low-key month for many distressed funds, whose investors have had a tough year. In October, distressed portfolios returned the worst performance of all strategies tracked by Absolute Return. The index's 0.88% gain for the month brings its year-to-date total to 5.87%, only just better than the worst performing strategy this year, Convertible & Equity Arbitrage, at 5.14%, and well below the Composite, now up 9.19% for the year.

Among the more notable players, Phil Falcone's Harbinger Capital Partners Offshore Fund, which has made outsize profits shorting credit this year, gained 21.4% in October, bringing its year