Where Did They Come From?

My conference panel yesterday spent lots of time discussing the explosive growth of fundraising in the distressed and “corporate opportunities” sectors. I certainly understand the deal-flow causation, but here’s my question: Who is actually investing the money?

I’m not so much talking about the legacy distressed firms that are simply expanding fund sizes, but more the generalist firms that are now devoting billions to an asset class which, in the past, has at best been a minimal point of focus. Was there some sort of “Distressed Investing Academy” that held sessions last fall, and unleashed hundreds of newly-qualified professionals into the market? Or are certain firms trying to fit square pegs in round holes?

I asked that question of some distressed vets yesterday, who hedged before settling on the “holes” theory.