Distressed debt: Why LPs should take a longer-term view

There is a near-term discount opportunity in distressed, but investors need to bear in mind that fund managers may be investing over several years. Alex Odysseos of Houlihan Lokey reflects on the significance of this.

Alex Odysseos

Since the turn of events that took place earlier this year, it is clear that in alternative assets there is one strategy demanding more attention than most: distressed debt. While the current market dislocation seems to be pushing distressed debt managers to the forefront of capital raising, is it as simple as assuming this strategy will be the most successful over the next two to three years given the market dynamics?

LPs increasingly want to discuss distressed debt strategies within private debt in more detail and are keen on increasing their exposure to the strategy.