Stressing out over distressed debt: despite meltdown, hedge fund managers still betting on rebound.

Investment News, July, 2002 by Benjamin, Jeff

Though WorldCom's recent meltdown may have singed the distressed-debt market, hedge fund managers insist it's still a good time to be investing in below-investment-grade bonds. With few exceptions they say they are continuing to allocate record-level assets to strategies that essentially bet on the ability of bankrupt companies to satisfy their creditors.

The investments are a strong indication that hedge fund managers are still betting on an economic rebound, which troubled companies are counting on to help rebuild their businesses. Shoaib Khan, senior vice president of research at LJH Global Investments LLC, a Naples, Fla., hedge fund advisory firm overseeing $3 billion, says WorldCom left some hedge funds down as much as 8% for the month of...

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