A number of distressed-debt hedge funds are abandoning traditional loan-to-own strategies after years of low interest rates resulted in meager returns for investors, and some are even investing in equities, WSJ Pro Bankruptcy reported. Distressed-debt investing, long the purview of legendary investors like David Tepper of Appaloosa Management and Howard Marks of Oaktree Capital Management, has been a tough way to make money in recent years. A decade of low interest rates have made it much easier for troubled companies to find money and refinance debt. BlueMountain Capital Management LLC and Arrowgrass Capital Partners LLP are some of the bigger funds that have shifted away from this niche-investing strategy.
