TY - JOUR T1 - The Market in Defaulted Bonds and Bank Loans JF - The Journal of Portfolio Management SP - 93 LP - 105 DO - 10.3905/jpm.2006.644200 VL - 32 IS - 4 AU - Edward I. Altman AU - William Stonberg Y1 - 2006/07/31 UR - https://pm-research.com/content/32/4/93.abstract N2 - There has been remarkable growth in the distressed debt market in the United States in the past 20 years. Data presented here indicate why distressed debt (vulture capital) investing is perhaps the fastest growing sector in the hedge fund universe and why it has also become of interest to the private equity sector. Returns on distressed assets, including the equity of firms emerging from Chapter 11, were spectacular in 2003, excellent in 2004, and, for many hedge funds, also good in 2005. The same was true for investment in a long-only strategy of defaulted bonds and loans in 2003-2004. Investors have many more investment options than strictly defaulted securities, and are increasingly following diverse strategies.TOPICS: Real assets/alternative investments/private equity, portfolio construction, portfolio theory ER -