Gundlach Says Fed Timing Lousy As Corporate Credit ‘Tanking’

Meridee Moore, who is returning client money in her $1 billion hedge-fund firm Watershed Asset Management and converting it to a family office, cited the difficulty in finding good investments in distressed companies.

‘Grinding Declines’

“The last eighteen months have seen grinding declines in stressed and distressed credit and special situations equities,” she wrote in a letter to clients. “But even though market prices are lower, we have not been able to find new liquid credit investments with attractive returns and a margin of safety.”

Oaktree Capital Group LLC, the world’s biggest distressed- debt investor, has the most investment opportunities since Lehman Brothers Holdings Inc. collapsed, according to co- Chairman Howard Marks.

“Post Lehman there was too much to do, and now there is again,” Marks said Tuesday, referring to the financial crisis that followed the collapse of the investment bank in September 2008. “For the credit investor we have our first opportunities in several years. It’s been a long, long time."

Gundlach, who has said he doesn’t want his Total Return fund to become too big to maneuver, said he’s “open minded” about a soft close to new money in the fund next year.

“What we’re interested in is performing,” Gundlach said. “We feel very comfortable with our ability to manage” the fund.