Vulture fund
Fund that invests in distressed assets / From Wikipedia, the free encyclopedia
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A vulture fund is a hedge fund, private-equity fund or distressed debt fund, that invests in debt considered to be very weak or in default, known as distressed securities.[2] Investors in the fund profit by buying debt at a discounted price on a secondary market and then using numerous methods to subsequently sell the debt for a larger amount than the purchasing price. Debtors include companies, countries, and individuals.
Vulture funds have had success in bringing attachment and recovery actions against sovereign debtor governments, usually settling with them before realizing the attachments in forced sales. Settlements typically are made at a discount in hard or local currency or in the form of new debt issuance. In some instances, such as those involving Peru and Argentina, such a seizure blocked payments to other creditors of the sovereign obligor.[3][4][5]