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PE Firms Race to Block The Exits to Ward Off Vulture Funds

  • 66% of loans in 2019 restricted on sales to distressed funds
  • Move gathers pace as borrowers prepare for credit cycle turn
Updated on

Leveraged loan investors in Europe face heightened risks of finding their escape route slammed shut, as private equity firms impose stricter rules on sales to distressed funds.

PE firms are tightening rules to make it harder for such asset managers to seize control of their companies in the event of a debt restructuring. About two thirds of loans sold this year faced curbs on selling to such funds, compared with just 29% in 2017, according to Reorg Debt Explained.