Private equity’s latest money-making trade: buying its own debt
Some of the world’s top private equity firms are scooping up the debt of their own portfolio companies from banks at steep discounts as they seek juicy returns amid a lull in deal making.
By Claire Ruckin and Paula Seligson / Bloomberg
Advent International Corp. recently bought a portion of a loan that helped fund its buyout of a Royal DSM unit, while Clayton Dubilier & Rice has purchased debt supporting at least two of its deals over the past year. Just last week Elliott Investment Management snapped up a USD 550m chunk of bonds backing its acquisition of Citrix Systems Inc. at 79 cents on the dollar, following a similar move in September.
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