Guardian Unlimited – Three "distressed debt investors" – hedge fund Polygon, restructuring specialist Oaktree and private equity firm Alchemy – have taken control of Countrywide, Britain’s biggest residential estate agent, which was bought by US private equity firm Apollo less than two years ago for about £1bn, mostly financed by debt. Together, they have taken a majority stake for one-third of the price paid by Apollo.

Distressed debt investors, which specialise in buying financial instruments relating to troubled companies at rock-bottom prices, have been saying for two years that buying debt on the "secondary market" – where company loans are traded after the original lender has sold the debt on – was too expensive. Now, they appear to be judging it the right time to move back in.

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Tags: alchemy, apollo, distressed debt investors, financial-instruments, guardian-unlimited, loans, majority stake, oaktree, private equity firm, residential estate, restructuring, right-time, rock bottom prices, troubled companies

Guardian.co.uk – "Parts of the current complexity arises from the existence of distressed debt investors who sometimes see commercial advantage from using an insolvency process to organise the sale of the viable part of a business to a solvent buyer leaving behind the least profitable parts," Tony Lomas, chairman of PwC Business Restructuring, said.

Vulture funds buy debt in struggling firms at a significant discount – sometimes at 20p in the pound – expecting that when the company breaches its loan covenants and falls into administration, a sale of assets may repay debt at a higher price.

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Tags: assets, breaches, business restructuring, commercial advantage, complexity, distressed debt investors, existence, guardian, insolvency process, loan covenants, tony lomas, vulture funds