Fund managers are all looking for new investment choices for distressed debt investors. Though it appears that it is currently a good time for distressed debt investors because of a new group of entrants into this sector, research seems to be indicating that the opposite is true.
General Motors is still dipping into distressed debt territory because of poor performance in North America among other reasons. However, GM is not quite there yet, and if it does dip into distressed debt, it will have little impact on the ratio.
A few funds, like Oak Tree Capital, are concerned that the distressed debt market will not pick up this year… and not even somewhere in the near future. ■
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