What is a vulture fund?

What Is a Vulture Fund? A vulture fund is an investment fund that seeks out and buys securities in distressed investments, such as high-yield bonds in or near default, or equities that are in or near bankruptcy.

Why is it called a vulture fund?

The term “vulture fund” is a metaphor which is used to compare these particular hedge funds to the behaviour of vulture birds “preying” on debtors in financial distress by purchasing the now-cheap credit on a secondary market to make a large monetary gain, in many cases leaving the debtor in a worse state.

Are vulture funds legal?

President Michael D Higgins has signed the Fianna Fáil Private Members’ Bill to regulate so-called vulture funds. The President signed the bill into law on Christmas Eve.

Is Mars capital a vulture fund?

Mars, a so-called vulture fund, services the loans on behalf of US debt fund Oaktree. Mars was one of the biggest foreign buyers of Irish mortgages after the financial crisis, and also services debts.

Is vulture a capital?

Vulture capital is funds invested to exploit and profit from unsuccessful enterprises and individuals or organizations that lack the resources to achieve success. The term is derogatory wordplay referencing venture capitalism (VC), which is not by definition exploitative.

Why is it called a hedge fund?

A hedge fund is an investment vehicle that caters to high-net-worth individuals, institutional investors, and other accredited investors. The term “hedge” is used because these funds historically focused on hedging risk by simultaneously buying and shorting assets in a long-short equity strategy.

Are pepper finance a vulture fund?

Pepper Ireland manages loans acquired at a discount from other institutions after the 2008 financial crash, including portfolios acquired from Bank of Scotland (Ireland) after it pulled out of the market here, Permanent TSB and Danske Bank, as well as loans sold on by so-called vulture funds.

Is Pepper Asset Servicing a vulture fund?

Pepper Ireland services 60,000 residential mortgages on behalf of vultures from its base in Shannon. Now its parent company is to be sold to Australian group Link in a €200m deal.

How do vulture capitalists make money?

A vulture capitalist is a type of venture capitalist (VC) who looks for opportunities to make money by buying poor or distressed firms. Just like the bird they are named after, vulture capitalists are predatory in nature.

What are vulture real estate purchases?

A vulture investor purchases financial instruments and assets at knock down prices from distressed people, companies and entitites, i.e. they are in desperate need of money. Borrowers who are no longer able to make payments on their mortgage and need to sell their property are often sought after by vulture investors.

What are the risks of hedge funds?

Hedge Fund Risks. Although hedge funds are still prohibited from fraud, this lack of oversight creates additional risk. Besides, hedge fund investors are also part owners of the LLC. This means they could lose their investment if the hedge fund goes bankrupt as a business, even if the investments do OK.

What is vulture investing?

Term “vulture fund”. A related term is “vulture investing”, where certain stocks in near bankrupt companies are purchased upon anticipation of asset divestiture or successful reorganization.

What are vulture funds?

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.

What is the structure of a hedge fund?

Organizational Structure. The typical hedge fund structure is really a two-tiered organization. The general/limited partnership model is the most common structure for the pool of investment funds that make up a hedge fund.