At the moment, and probably for the next year or two, the economy is doing fine. But the cracks in the system will get bigger and bigger as companies have to deal with all the leverage on their balance sheets at the same time as interest rates rise – hitting those exposed to floating rates. It’s a future scenario that should play into the hands of distressed investors such as Marc Lasry, co-founder and chief executive officer of Avenue Capital Group.
WATCH: ‘One to two years’ before distressed cycle – Lasry
A benign economy won't last forever, with high leverage and rising interest rates meaning that the cracks are already appearing. PDI caught up with Avenue Capital's Marc Lasry in this three-minute video.