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The Distressed Debt Cycle: Why This Time Will Be Different

June 2009

The coming distressed debt cycle, in which over $5 trillion in outstanding securities is expected to change hands, will undoubtedly provide opportunities for outsized returns. To capture these returns, many investors have turned their sights to the same distressed debt strategies that succeeded in previous cycles. We believe this is a mistake. This distressed debt cycle will be different, not just deeper, than past cycles, and will require a modified approach.

 
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