Reuters – The allure of moribund mortgage bonds and corporate debt has grown so strong that Wall Street’s biggest money managers are picking over their carcasses, suggesting the year-long credit crisis may be over the worst.
BlackRock, Third Avenue Value Management, Trust Company of the West, Pacific Investment Management or Pimco, and Metropolitan West Asset Management have launched or plan to launch distressed debt funds, betting that mortgage security and corporate debt prices have fallen enough to warrant interest, even though further declines are possible.
Even influential investor Jeremy Grantham said he has doled out money to three such funds for his personal account. "A well-managed distressed fund will no doubt do very well and will have great opportunities," Grantham, chairman of global investment management firm GMO, said in an interview.
