Best books to read to get me up to speed at a distressed debt hedge fund?
I am about to start working as an analyst at a distressed debt and credit hedge fund. I just graduated from an undergraduate finance program however I was not exposed to much about hedge funds or credit/distressed debt. Just looking for some books, information outlets, or study methods to help bring me up to speed and more knowledgable!
Distressed Debt Analysis by Stephen Moyer is a good start. Anything written by Howard Marks (including any of Oaktree's previous investor letters)
Distress Investing by Martin Whitman and Distressed Debt Analysis by Stephen Moyer are all you need. Would recommend however reading Moyer before Whitman.
Would I need a great knowledge of credit to understand these? Really have only been exposed to equities and very basic credit concepts in school.
I would recommend reading about distressed debt and countries that offer bonds below par-value. As terrible as it sounds, hedge funds take advantage of countries that offer bonds and refuse to pay par-value. You should definitely check out various vulture funds. They take advantage of countries that offer bonds as mentioned and sue them for the full value. Argentina if i remember correctly wanted to give a 97% haircut on their bonds investors bought.
Go back to Russia, commie
You realize there's something called original issue discount right? For a variety of reasons, companies (or theoretically countries) issue debt below par, this isn't controversial. Usually it's because the company has poor credit and/or low near term cash flows so they issue some kind of zero coupon bond with a balloon prin payment at the end. Eg you buy the bond at issue at 97 and after X years get back 100.
For Moyer, not at all.
You should check out the whole situation with Paul Singer and Argentina bonds as an example. His vulture fund make billions off Argentina bonds and the country legally agreed to U.S court laws. He even tried to seize one of their ships lol.
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