At best, we are in recession. At worst, spiralling somewhere worse: a slump or depression or another negatively descriptive scenario.
Meanwhile, professional investors will be looking for opportunity - as for them, the definition of the word 'crisis' is when wealth is handed from the fearful to the brave.
Brave but not stupid. The professional investor, starts by looking at the overall macro-economic cycle. From growth to boom, boom to retraction, retraction to recession, and from bust to recovery, the professional investor will be looking for the strategies most likely to survive in those environments.
For recession and worse, the world of opportunity starts with buying "distressed" assets. The world will see the first wave of institutional and HNW buying simply because that world recognises that to make money, you need to "buy low and sell high".
Anything likely to have a higher price during an economic recovery might fit the "distressed" tag, with fund managers adding in titles such as "opportunity fund"; "event driven" and "value-based."
Equity Bridge Capital's (EBC) Warren Mal-schinger's view is that their arbitrage and opportunity fund is an early "distressed opportunity" founded in the US housing market.
Malschinger says the fund is "ready to turn investment into rewards fairly quickly due to favour-able restructuring incentives to homeowners and the will of government to underwrite further decline in the mortgage market; philosophically, the market has already turned". So what does it do?
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