According to The New York Times, everybody's doing it! Well, maybe not the birds and the bees, but certainly Blackstone (NYSE: BX), KKR, and now Apollo Management, the latter to the tune of $1 billion, are investing in distressed debt.
It's no surprise that Blackstone is ahead of the game and has already raised a $1.4 billion fund to focus on cheap loans and bonds. The Deal.com also lists Cerberus and Carlyle as being interested in joining the party.
Apollo's Leon Black wrote in a letter to investors:"We're doing exactly what you would expect of us in this market -- using our distressed expertise and appetite for complexity to find investments in good companies that are available at a significantly discounted basis."
Luckily for Apollo, they happen to own some of those "good companies" that are "significantly discounted." So some of the bonds it will invest in will be issued by companies it already owns. Neat trick, huh?
As for the "appetite for complexity" -- I'll bet. Blood from a stone, anyone?
Private equity's distressed debt investment party
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