Distressed debt is about to have its day, according to some prominent investment managers.
"A lot of money has been raised in anticipation" of a bull market in distressed debt, said Martin Fridson, chief executive of Fridson Investment Advisors LLC and former head of high-yield strategy at Merrill Lynch & Co. Inc. Both firms are based in New York.
That money is sitting on the sidelines, but it won't be sitting there much longer, Mr. Fridson said.
"The time is not yet; we're just waiting," said Bruce Berkowitz, founder of Fairholme Capital Management LLC of Miami, adviser to the $8.4 billion Fairholme Fund.
But it is almost here, said Mr. Berkowitz, whose investing acumen is so well respected that he is mentioned by some industry experts as a possible successor to Warren E. Buffett at Berkshire Hathaway Inc. of Omaha, Neb.
According to James Keenan, co-manager of the $1.7 billion BlackRock High Yield Fund, offered by BlackRock Inc. of New York, opportunities in distressed debt are already starting to pop up.
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