A keen sense of smell

Much like bears and hyenas, good investment bankers can smell the carcass of a rotting asset class from many miles away. This past week, The Economist provided yet more evidence that life on the corporate Serengeti is about to get a little tougher:

“The past few years have been lean ones for those who feed off corporate carrion. Now, as credit markets creak, distressed-debt investors—known less kindly as vulture funds—are confident that their time has come at last.

Many can claim to have seen the rout coming. Private Equity Intelligence, a research firm, calculates that vulture funds raised $15.6 billion in the first seven months of this year, more than the $13.9 billion they garnered in all of 2006, itself a record. A further $30 billion is in the works, including a giant $20 billion fund being pieced together by Goldman Sachs.”

I’ve already noted here and here how corporate lawyers are following the bankers to the watering hole. When in doubt, follow the money (or the lack thereof).