tag:blogger.com,1999:blog-6321089372587128676.post5548028803715674819..comments2023-10-17T10:01:00.917-04:00Comments on Distressed Debt Investing: Exclusive Interview with Hedge Fund Manager Peter LupoffUnknownnoreply@blogger.comBlogger3125tag:blogger.com,1999:blog-6321089372587128676.post-37551248201991330812009-09-28T10:55:54.809-04:002009-09-28T10:55:54.809-04:00If only they were sophisticated investors, they co...If only they were sophisticated investors, they could get out of some of the riskiest positions. But I fear they are not. They are buy and hold investors, non high yield specialists for the most part. Also, we see a real appetite for high yield issuances (feeding the ducks again like it is 2006-07 all over again), but bank loans ? do you see banks lending for private equity operations ? I just see in the USA as well as in Europe bankers pitching high yield bond issuances to stretch maturities and repay bank debt maturing soon, but no real new bank debt.sebastiennoreply@blogger.comtag:blogger.com,1999:blog-6321089372587128676.post-11782620666324856212009-09-28T00:21:27.029-04:002009-09-28T00:21:27.029-04:00An important aspect to think about when pondering ...An important aspect to think about when pondering this rally is the role that index funds have played. I have read so much fluff out there about strategists telling their clients to allocate money to passive high yield. And the AMG data has shown that a lot of capital has moved to HY and Levered Loans. This has had a definitive effect on the market - sadly I feel the passive guys are going to get smoked.Hunterhttp://www.distressed-debt-investing.comnoreply@blogger.comtag:blogger.com,1999:blog-6321089372587128676.post-8380543122922007792009-09-25T22:13:35.651-04:002009-09-25T22:13:35.651-04:00Judging by some of my current experiences, an issu...Judging by some of my current experiences, an issue for us as credit investors is that most new actors in the field are basically market-timers with gregarious equities-like mentality. In other words, retail investors and new funds were massively attracted by the idea that the high yield class had been decimated and should recover (with misconceptions about recovery values). As such, the rally has been indiscriminate while the economics of most high yield issuers have not changed that much. Therefore (even more so for European credits,where investors are more naive than here) for the next months, the challenge is doing the granular work at the companys' level to separate the wheat from the chaff. Also cap arb, pure event driven investing (see my Orco trade) and even basis trades will probably be more heavily weighted in our portfolios than just deep value home-runs.sebastiennoreply@blogger.com