Distressed debt hedge funds optimistic about economic slowdown

July 15th, 2010
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As the specter of a “double-dip” recession appears more and more likely, most fund managers and investors have braced themselves for lower returns and a drop in investor confidence - except for distressed debt hedge funds and their managers. According to Financial News, most of the hedge funds in the asset class, which performed well last year after losing 27% in 2008, have extended lock-in periods to prevent short-term withdrawals by skittish investors. Many managers also believe that more distressed debt investment opportunities will arise as economic growth slows once more and could prompt additional investments.

As a result, more and more distressed debt funds are popping up even as worry over the economy’s prospects increase. BlueBay Asset Management manages $1.6 billion in distressed debt and launched a Europe-focused distressed debt hedge fund in December of 2009, its second fund in the asset class. OakTree Capital Management has plans to do the same, and anticipates the launch of its third Europe-focused fund later in 2010.
For Detailed Investor Profiles on these Investors, click below:
BlueBay Asset Management
OakTree Capital Management
Related People: Bruce Karsh; Howard S. Marks; Hugh Willis; Larry Keele; Mark Poole; Richard Masson; Steve Kaplan
Related Entities: BlueBay Emerging Market Bond; BlueBay Global Convertible Bond; BlueBay High Yield Bond; BlueBay Multi-Strategy; BlueBay Value Recovery; BlueBay Investment Grade Bond; OakTree Distressed Opportunities; Oaktree Emerging Market Fund; Oaktree Japan Opportunities Fund; Oaktree US Convertibles
Related Article Tags: Multi-Strategy, Long Short, Equity, Debt and Global Macro Hedge Fund News; Hedge Fund Launches and Hedge Fund Closings

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