Thursday, August 30, 2007

Say hello to the ‘market dislocation vehicle’

Blindingly obvious, really - Wall Street’s having a sale of returned/shop-soiled stock.

Or, more precisely, investment banks are following the lead of some private equity funds in launching fresh funds to buy leveraged loans that are trading at depressed prices in the secondary market. Goldman Sachs and Lehman Brothers are actively raising funds, according to, on the the assumption that much of this debt is undervalued and offers attractive yields.

By some estimates, about $300bn of “hung” buyout debt is expected to hit the market after America’s Labor Day holiday.

With a view to chasing bargains in this fire sale, Goldman has reportedly christened its new fund a “market dislocation vehicle,” while Lehman has gone for the more prosaic “special situations fund.”

Meanwhile, Dan Primack at PE Week prefers the more graphic “hung bridge fund,” reporting that Los Angeles-based Oaktree Capital Management is raising between $3bn and $5bn to offer such structural market support.

This entry was posted by Paul Murphy on Thursday, August 30th, 2007 at 16:29 and is filed under Capital markets, Private equity. Tagged with goldman sachs, Lehman Brothers, oaktree. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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Lunch is for wimps

Lunch is for wimps
It's not a question of enough, pal. It's a zero sum game, somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred from one perception to another.