Goldman Distressed-Debt Traders Ensnared in Market Turmoil
ByEven Goldman Sachs Group Inc. hasn’t been left unscathed by the carnage in the market for distressed debt this year.
Goldman Sachs has lost $50 million to $60 million on its distressed-trading desk in 2015, according to people familiar with the performance. The unit suffered losses on its position in Verso Corp., a paper producer whose bonds lost two-thirds of their value this year, as well as on debt of energy companies, said the people, who asked not to be named discussing the information because it isn’t public.
Banks and investors who buy debt that mainstream money managers jettison have had a tough year making profits. Not only are they chasing a limited number of opportunities, they’re losing out on usually successful strategies. Commodities-linked debt has been disastrous. Even litigation-dependent investments, where distressed-debt buyers have an edge in predicting how a bankruptcy court will treat particular slices of debt, haven’t panned out…
Goldman Distressed-Debt Traders Ensnared in Market Turmoil
