On its prior conference call, The Blackstone Group LP (NYSE: BX) said it's planning to scoop up distressed buyout bonds. With its cash hoard, it seems like a good bet. Besides, there are signs that the debt markets are picking up, especially in light of the financing of the First Data deal.
According to news reports, some other firms now are seeing dollar signs from the same strategy. Take Onex, which is a top private equity firm in Canada.
But there's a hitch: Onex does not have the right staff to pull it off. Just like many other private equity firms, Onex focused on putting deals together. Onex said it is talking to a two-person group to help out. Hmmm....does seem kind of flimsy, huh?
Basically, this is yet another indication of why big firms, like KKR, TPG, and Blackstone, have big advantages. With their scale and resources, they certainly are nicely positioned when markets have sudden changes.
But, the distressed debt opportunity might be big enough for many firms. After all, as Onex's CEO, Gerald Schwartz, said: "there are opportunities that are just staggering."
Tom Taulli is the author of various books, including The Complete M&A Handbook
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