Plans Waking Up To Distressed Opportunities

Distressed debt could be the next hot asset class, with the potential to deliver annual returns in the region of 20%, providing that default rates start to pick up next year. Consultants and pension plans are paying increasing attention to the area, say managers, who, not surprisingly, are urging in...

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Bibliographic Details
Published inMoney Management Letter p. 1
Main Author --Emma Blackwell & Matthew McCue
Format Trade Publication Article
LanguageEnglish
Published London Pageant Media 29.08.2005
Subjects
Bonds
Corporate debt
Pension funds
Return on investment
Trends
United States
US
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Summary:Distressed debt could be the next hot asset class, with the potential to deliver annual returns in the region of 20%, providing that default rates start to pick up next year. Consultants and pension plans are paying increasing attention to the area, say managers, who, not surprisingly, are urging investors to get in now before the best funds close. Consultants trying to introduce private equity to a pension fund suggest distressed debt because there is a quicker return on capital and less of a J-curve effect, says Tom McGowan, managing director in marketing at Siguler Guff & Co. Fund Evaluation Group expects record high-yield bond issuance to drive opportunities.
ISSN:1529-2347