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From the Opalesque team:

Florida-based Consilium Investment Management will launch a Corporate Recovery Fund (CCRF) to focus on opportunities in the corporate credit space arising from increasing rates and fees as banks continue to be too constrained to meet the demand for loans. The CCRF will focus on debtor in possession (DIP) financing and other super priority loan opportunities.

While corporate default rates have continued to rise, there is some question as to exactly where we are in the cycle. Moody’s Senior Vice President Albert Metz recently said that the default rate has slowed since March, suggesting that the worst may be behind us. However, at the Reuters’ Restructuring Summit held on Monday, the outlook for default rates placed the US at the midpoint of a very painful cycle. (Source)

“We agree with rating agencies that are predicting significantly higher default rates over the next year or two compared to recent history,” said CCRF portfolio manager James Anders. The firm cites default rates through August 2009 ($453.1bn), which surpass the amount for the entire year of 2008.

Other firm’s in this space, such as Bain Capital, a participant at the Reuters’ Summit, have expectations for 2009 defaults to total between 180 and 210 and place the four-year default rate at 500 to 600.

Consilium’s new fund will look for the combination of co......................

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