Any distressed fund analysts?
How does your fund screen investment ideas? Do you go through recent bankruptcy reports and try to find potential good deals?
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From my experience, if you're reading bankruptcy filings for ideas you are way too late to the party.
What's worked better is looking for vulnerable and out-of-favor names/sectors and tracking them pre-distress. Realistically you are not going to be able to buy stuff at the trough but that's the price you have to pay for access in these situations -- trough prices will coincide with almost 0 liquidity. By the time an issuer files, the table is basically already set.
So to clarify most bonds don't trade even close 0 when a company files bankruptcy. If a distressed fund is buying up large positions, chances are they are not selling if they are trying to loan to own the company. So from that standpoint you have to be a little bit early while keeping a low profile. Simple screens such as large bond price movements, credit rating downgrades, lots of debt compared to equity values, overleverage, distressed bond pricings, upcoming maturities that are having difficulties getting refinanced (anything within 6 months is very bad), etc
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