VIRTUALLY EVERY WEEK brings news of another stunning
corporate collapse. Debt default rates - at more than 12% - are at
historical highs and credit downgrades are outrunning upgrades by
six to one. Whole industry sectors are in deep trouble. And the
volumes of bank loans and securities caught up in bankruptcy,
restructuring or distress keep on rising.
Enron, Global Crossing, Kmart, NTL, Energis, Marconi: the
corporate casualty list is long, the sums involved enormous and the
causes diverse.
But in all these cases, and hundreds more besides, there is one
link: the vulture funds are there, and in force. Whether these
companies live to fight another day - and in what shape - will
largely be determined by these super-activist fund managers.
For years a relatively small band of specialist investors has made
fantastic returns - and occasionally fantastic losses - by buying
up the bank loans and securities of companies in financial
difficulties in...
