distressed investment funds

Distressed investment funds are financial pools that invest in companies facing severe financial difficulties, such as bankruptcy or insolvency. These funds aim to buy these distressed assets—like company debt or assets—at discounted prices, hoping to profit if the company recovers or through asset liquidation. They involve higher risks due to the uncertain outcomes but can potentially offer substantial returns. Investors in these funds need a high risk tolerance and a clear understanding that their investments are in troubled companies with a higher chance of loss.