Which opportunistic credit funds have deployed fully at peak market conditions last 1-2 years and might now be low on capital as we head into a much better investment environment? Curious which funds are gonna have to work out these peak investment and turn their investment teams into workout groups
| +49 | How to break into tier 0 shops/funds like Rentech/XTX | 10 | 8h |
| +17 | Q&A: From IB to HF in London to LO in Dubai. | 7 | 2d |
| +9 | Stay or leave? | 1 | 5d |
| +9 | PM is a dumbass | 5 | 10h |
| +7 | Tips for breaking into Macro RV? | 3 | 2d |
| +5 | Citadel Pitch Comp | 2 | 3d |
| +3 | Jain | 1 | 4d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Based on the most helpful WSO content, opportunistic credit funds often face challenges when they deploy capital during peak market conditions. Many funds, particularly in credit, tend to invest in what's available during good times, which can lead to exposure to "bad companies with bad balance sheets" rather than waiting for better opportunities, such as "good companies with bad balance sheets" undergoing reorganization.
For example, during the March/April period of a downturn, many credit funds were fully invested and subsequently hit hard, as seen with cases like Caesar's TL. This pattern suggests that funds heavily deployed during peak conditions may now face the need to shift their focus toward workouts and restructuring efforts.
While specific fund names aren't explicitly mentioned in the context, the general trend indicates that funds with aggressive deployment strategies during high valuations are likely to face these challenges.
Sources: Credit - Pod Shop/MM vs. Distressed/Special Sits HF, Q&A: BB LevFin - Mezzanine - Opportunistic PE, Undergraduate Opportunities - Credit Funds, Credit Hedge Fund opportunities
I think the major opp credit teams (HVF, ASOF, Oaktree, Bain SS, etc) have raised or are raising large new funds. Sure, some of their investments might need to be restructured but these teams are well positioned to do that given 1) relevant expertise 2) typically very tight docs 3) relatively concentrated portfolios vs direct lending funds.
Also, these funds barely have any software exposure and while they often provide junior capital, their underwriting and due diligence processes are probably more rigorous than most senior debt providers.
Consequatur inventore mollitia quos natus at totam. Eius fugit sit rem tempore labore dolorum.
Qui quia sit asperiores ut at vitae sit. Sit totam corrupti similique qui cum cum in. Dicta rerum corporis voluptatem adipisci voluptatem perferendis et.
Expedita provident quia et error necessitatibus maxime. Voluptatibus nulla earum odio vero. Non et dolorem eum nam aut ut qui sed.
Placeat placeat alias autem esse numquam eum et. Quae nesciunt laudantium magni. Reprehenderit consequatur voluptate explicabo sunt temporibus error. Est voluptas exercitationem quibusdam in placeat sed.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...