Corporate Defaults, Workouts and the Rise of the Distressed Asset Investment Industry

Douglas Cumming and Grant Fleming

No 28, CEH Discussion Papers from Centre for Economic History, Research School of Economics, Australian National University

Abstract: We examine the formation and growth of the distressed asset investment industry during the late twentieth century, with specific focus on the strategies of the leading firms. The distressed asset investment industry is dominated by firms based in the United States and is relatively concentrated, due in large part to early movers developing distinctive investment capabilities through participation in landmark transactions, relationship-specific resources, and exploiting scale effects. We argue that the participation of these firms in the bankruptcy and corporate restructuring markets has resulted in private sector workouts becoming more competitive and more efficient over the last thirty years, especially in the United States.

Date: 2014-04
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Journal Article: Corporate Defaults, Workouts, and the Rise of the Distressed Asset Investment Industry (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:auu:hpaper:028

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