HOW do you invest in it?
It is a strategy in which an investor purchases debt of a financially distressed or insolvent company
with the hopes of realizing a financial return. DISTRESSED INVESTMENTS INCLUDE:
Investors buy debt instruments issued by a financially distressed or insolvent company from its early creditors and debt holders, or on the secondary market. DISTRESSED DEBT INVESTORS ARE CHARACTERIZED AS EITHER PASSIVE OR ACTIVE.
WHAT di�erence does it make?Recent studies have shown that when a hedge fund is involved in a bankruptcy proceeding or restructuring, there is a greater probability of a successful financial recovery with benefits to creditors, shareholders, and the company itself.DISTRESSED DEBT INVESTMENT CAN HELP PROVIDE:
COMPANY DEBT
LOANS & BONDS
VENDOR & TRADE CLAIMS
Investors buy debt instruments in the hope of realizing a return through price appreciation determined by the actions of others.
Investors participate in the restructuring or bankruptcy process, working directly with company management or other creditors to ensure a successful outcome.
The majority of investors involved in distressed debt strategies are part of the
alternative investment industry. THESE INVESTORS OFTEN WORK
ALONGSIDE THE FINANCIALLY DISTRESSED COMPANY TO EXECUTE A SUCCESSFUL RESTRUCTURING OR
BANKRUPTCY PROCEEDING.
LIQUIDITY
BALANCE OF POWER DURING
THE BANKRUPTCY & RESTRUCTURING
PROCESS
BALANCE OF POWER DURING THE
BANKRUPTCY AND RESTRUCTURING
PROCESS
HIGHER DEGREE OF DEBT
RECOVERY
HIGHER PROBABILITY OF COMPANIES
EMERGING FROM BANKRUPTCY
POSITIVE IMPACT ON OVERALL
COMPANY VALUE
RELIEF OF FINANCIAL
CONSTRAINTS
DEBT INVESTING
Want to know more?
Are HEDGE
ACMEACME
ACME
ACME
PASSIVE ACTIVE
visit managedfunds.org
ACME
WHAT IS distressed debt investing?
WHO invests in distressed debt?
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