Credit hybrids go into high gear

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Structures that resemble private equity funds are attracting big bucks, as managers think the debt market will take years to turn around

By Steve Rosenbush and Michelle Celarier

Last year's credit meltdown had hedge fund managers salivating at the prospects of big returns on roughed-up securities, many of which seemed to be trading way below their intrinsic value. But with the situation more dire than usual, it was clear the payoff seemed many years away, and a typical distressed-debt hedge fund with quarterly, or even yearly, liquidity wouldn't suffice. Nor would