MSN MoneyCentral – A new survey indicates a marked increase in hedge-fund and private-equity involvement in corporate turnarounds, but a pronounced decline in both in-court and out-of-courtrestructuring work for turnaround professionals.
More than 200 turnaround, financial-advisory and consulting firms that took part in the Turnaround Management Association’s 2006 Trend Watch poll reported a spike in inquiries for services from private-equity firms and hedge funds in 2006. The survey shows 35 percent of respondents named such investors as sources of business, up from 13 percent in 2005.
“Private-equity firms and hedge funds are controlling an increasing number of middle-market companies,” said Colin Cross, president of the TMA, a 7,100-member nonprofit dedicated to corporate renewal and turnaround management.
The survey, released Thursday at the association’s annual convention in Orlando, Fla., also highlights the effects of the tide of easy money available to troubled companies. Restructuring work involving bankruptcy filings declined, along with out-of-court restructuring work.
