Distressed Debt

Credit funds could target subordinated debt in next 12 months.

Howard Marks has long been seen as one of the more staid voices in a distressed-debt.

Private credit vehicles raised $57 billion in the first half of the year, buoyed by appetite for distressed strategies, according to research firm Preqin.

The big drop in CLO equity this year signals investor fear that this downturn will be more like the 1998 to 2003 period, where company defaults rise and stay elevated over the course of years, and profiting from improving prices in loans is hard.