Distressed Investing: Missed Opportunity?

October 13, 2020 | Joe McGuane, CFA, Senior Research Analyst, Alternatives

As the calendar flipped to 2020, many market prognosticators agreed that one of the longest economic expansions on record would continue throughout the year. Unemployment rates were near record lows across most major economies and many were expecting a record year for corporate earnings. The signing of the Phase One U.S-China trade deal helped drive markets to all-time highs in the early part of February. Nobody saw the rapid escalation of a global pandemic that pushed the global economy into recession and global markets into a tailspin.

This newsletter covers the shift in distressed investing this year amid the uncertainty surrounding the length and economic impacts of the pandemic, including a look back at the previous expansion that led to exponential growth of leveraged credit markets. Historically, distressed hedge funds have performed well after a crash, and as companies across many sectors face immense pressure, this current cycle is likely to create a robust opportunity set.

Read > Distressed Investing: Missed Opportunity?

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Joe McGuane, CFA
Senior Research Analyst, Alternatives

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