Distressed securities


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Distressed securities

A security of a firm that has declared or is about to declare bankruptcy. In the context of hedge funds, a style of management that focuses on securities of companies that have declared bankruptcy and may be undergoing reorganization. Investment holdings can include bonds as well as stock in these firms.

Distressed Security

A security in an unprofitable company, or in a company believed to be unprofitable. This is considered to be a high-risk security with the potential for high return because financial distress often precedes corporate restructuring. This may make the company profitable very rapidly. On the other hand, the potential for default is very high.
References in periodicals archive ?
Latigo's strategies include distressed securities, special situations and long/short credit and equity investing.
Previously, he spent several years at Oaktree Capital Management, where he was responsible for investments ranging from complex distressed securities to opportunistic asset acquisitions.
Presently Cerberus Capital Management has more than USD28bn under management invested in four primary strategies: distressed securities & assets; control and non-control private equity; commercial mid-market lending and real estate-related investments.
9 million for fair pricing and supervisory violations in connection with more than 700 retail customer transactions in distressed securities over a two-year time period.
9 million over issues tied to transactions of distressed securities and ordered the firm to pay over $540,000 in restitution and interest to more than 700 clients.
in 2012 and is a director in the distressed securities group.
In this new role, Santry will manage the firm's distressed and special situations trading effort, which includes the sales and trading of distressed corporate bonds, leveraged loans, special situations and other distressed securities.
Portfolio managers and investors in distressed securities typically must make an assessment not only of the issuer's ability to improve operations but also whether the restructuring process (which frequently requires court supervision) might benefit one class of securities more than another, both energy and time-consuming tasks.
Founded in 1949, Mutual Series has a long history as deep value investors with a very distinct style, searching aggressively for investment opportunities in undervalued stocks, merger arbitrage situations, corporate reorganizations and distressed securities.
What talent has come out of the banking and insurance companies has been migrating to hedge funds or investment banking, he says; that's true in Europe as well, where he has heard of specialists in distressed securities being able to command multiple-year guarantees and a seven-figure income.
stocks to low correlative investments such as hedge funds, and using different strategies within that asset class with specialized managers, such as investing in distressed securities.
That means taking long and short positions on stocks and bonds and diversifying into mortgage-backed securities, distressed securities, convertible arbitrage and other financial instruments.