Stung by Oil, Distressed-Debt Traders See Worst Losses Since '08
- Knighthead, Candlewood, Mudrick hedge funds under pressure
- `It wasn’t just energy,' one manager says as funds fall 5%
Distressed Debt Creates Hedge Fund Market Stress
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It’s mid-November, but for investors who trade in the debt of distressed companies, the year’s already done -- and they lost.
Hedge funds that specialize in the debt are grappling with their worst declines in seven years. Funds managed by Knighthead Capital Management, Candlewood Investment Group, Mudrick Capital Management and Archview Investment Group all posted losses through October. And year-end bonuses at Wall Street desks that trade distressed debt could be slashed by a quarter, Options Group said.