Loaded up with investment funds, these firms have now moved beyond buying marketable securities of a distressed entity and have taken to lending them money (with both high returns and large amounts of collateral), and then, if the thing does go belly up, moving in to do the restructuring and make their sale.
Nice work if you can get it and, according to a new market survey by data provider Debtwire, law firm Cadwalader, Wickersham & Taft, and investment bank Houlihan Lokey Howard & Zukin, 44% of respondents expect 1%-29% of their capital to be accounted for by direct investments.
