T-Minus 12 Months to the Rally

One trend recently is that many funds or money managers that can raise opportunistic money have started to call asking for distressed opportunities to invest in. These funds are all looking for high return (18-20%) opportunities and usually take a few months to get up and running in addition to a few more months to start sourcing actual buying opportunities. (These funds usually employ leverage, so high return hurdles don’t refer to nominal spreads.) With so many platforms springing up, from both established players and nascent funds, how long can it be before these players fall prey to competition? If you are the same bid for bonds and loans that the larger, relationship firms are, how do you invest your newly raised funds? How long before they relax their return hurdles and the lower parts of the various debt capital structures finds buyers at tighter levels? I guess we’ll see…

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One Comment on “T-Minus 12 Months to the Rally”

  1. quantum probability Says:

    Doesn’t sound like that high of a rate for distressed investment.

    Makes me angry that small businesses can’t have access to capital because of their lack of name brand, while screw-ups by famous players get credit-card-rate funding.

    What if 50% of the assets dump to zero?

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