Which firms even do public distressed anymore?

Based on the most helpful WSO content, the public distressed investing space has indeed seen a significant shift. Many traditional players have either exited or pivoted their strategies. Here's a breakdown:

1. Firms Still Active in Public Distressed:

   • Apollo, Oaktree, and Ares remain prominent in the space, continuing to engage in public distressed investing.
   • Other notable names like Mudrick, Farmstead, Caspian, Knighthead, and Warlander are still involved, though opportunities in public distressed are limited.

2. Shift to Private Strategies:

   • Many firms have transitioned to private credit or direct lending strategies. For example, groups previously focused on public distressed, like GSO (now Blackstone Credit), have moved towards private capital solutions and direct lending.
   • "Opportunistic credit" and "capital solutions" groups are increasingly focused on private financings rather than public distressed opportunities.

3. Decline of Traditional Players:

   • Firms like Anchorage, King Street, and Monarch have scaled back or shifted away from public distressed investing. This reflects the broader trend of reduced opportunities and increased competition in the space.

4. Market Dynamics:

   • The distressed market has become more crowded and less lucrative, with fewer large-scale distressed opportunities available. Many funds have struggled to achieve the high returns historically associated with the strategy, leading to a pivot towards other credit strategies.

In summary, while a few key players remain active, the public distressed space has contracted significantly, with many firms either exiting or focusing on private credit and direct lending opportunities.

Sources: Q&A: BB LevFin - Mezzanine - Opportunistic PE, Credit Hedge Fund opportunities, Credit Hedge Fund opportunities, Distressed Debt Investing Is really lucrative, Which of the large liquid distressed managers are still good seats?