Posted tagged ‘Platforms’

T-Minus 12 Months to the Rally

February 11, 2008

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…