A Case for Distressed Hedge Fund Strategies and How to Enhance Returns
Distressed investing is often characterized as a cyclical strategy dependent on macroeconomic factors that focuses primarily on the undervalued distressed debt of struggling companies that may require a restructuring through bankruptcy or another form of reorganization. Benefits presented by investing in this asset class can include equity-like returns with lower volatility and risk, illiquidity premiums, differentiated return drivers and portfolio diversification opportunities. Since its inception in 1990, the HFRI ED Distressed/Restructuring Index returned 9.7% annualized with a standard dev...