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.
He was regularly involved in financially advising those with distressed securities and holders on structural and financial affairs surfacing in bankruptcies, workouts, reorganizations and restructurings, on top of those resulting from securities laws.
Previously, he spent several years at Oaktree Capital Management, where he was responsible for investments ranging from complex distressed securities to opportunistic asset acquisitions.
Commenting on the first quarter 2016 results, Nader Tavakoli, President and Chief Executive Officer, said, "The substantial momentum we generated in 2015 across our strategies continued in the first quarter of 2016 with post-emergence records in quarterly purchases of Ambac distressed securities and adjusted book value per share, and a further 7% reduction in our insured portfolio.
Cerberus has more than US $29 billion under management invested in four primary strategies: operational private equity; real estate-related investments; commercial mid- market lending, and distressed securities and assets.
For example, in 2015, the worst performing hedge fund index according to BarclayHedge was distressed securities, down 9.86% for the year.
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.
Rothschild for 18 years where he managed the firm's proprietary capital in world markets with particular emphasis on convertible securities, options, futures and distressed securities. He became a partner in 1975, and vice chairman and a member of the board of directors of the public company in 1985.
The Financial Industry Regulatory Authority (FINRA) announced today that it has fined Merrill Lynch, Pierce, Fenner & Smith Incorporated $1.9 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.
Auction rate securities were viewed as cash equivalents from the inception of the ARS market in 1984 until February 2008, according to Pluris Valuation Advisors, a valuation firm that specializes in illiquid and distressed securities and business valuations, with offices in New York and California.
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.
Then there are high-net-worth individuals like billionaire Sam Zell, who just announced a $625 million fund to buy distressed securities backed by commercial real estate and other assets.