Private Equity, Hedge Funds Move Onto One Another's Turf

Private equity firms and distressed debt investors are opposites, and these days opposites attract, according to an article by The Wall Street Journal. Private equity firms have begun launching hedge funds, including those specializing in distressed debt, while hedge funds are getting involved in private equity deals.

An example of this new synergy is Jeff Aronson of Angelo Gordon & Co., a main player in the debt world and Mark Gallogly, responsible for private equity at Blackstone Group. The two have formed a fund that merges both sectors.

According to the Journal, the new fund has analysts predicting triumphant results, that the fund could easily become a multi-billion-dollar fund. Both men declined to comment.

Also, everyone's been talking about the young partners of Kohlberg Kravis Roberts & Co. leaving the firm to establish their own investment fund. Eton Park, is the hedge fund's name, and it was a hot pick when it launched last year. Oliver Goldstein from Warburg Pincus was selected to head the fund's private-equity investments.

Good news spreads fast, and that is why firms such as Texas Pacific Group and Carlyle Group plan to leap into these types of investments, according to The Journal.