Next big thing: Distressed debt funds?

As tech buyouts get more and more competitive, some PE firms are bidding up deals through overly aggressive debt. That’s what Alex Slusky of Vector Capital and Robert Smith of Vista Equity Partners said during my tech buyouts panel yesterday at the Buyouts Symposium. They both half-jokingly said that they plan to raise distressed debt funds in the next couple of years. All kidding aside, how long before over-leveraged buyout deals come tumbling down?