vulture funds

Among the largest phenomena that have arisen from foreign debt crises and loan repayment structures are predatory hedge funds, known as vulture funds. Simply said, vulture funds intentionally target the debt of financially distressed nations. They monitor the likelihood of a country’s ability to gain international debt relief. Right before the country receives aid, vulture funds buy up the nation’s debt. Then, they call in their debt bonds, suing the country once it receives resources that help debt cancellation. The result is that vulture funds, after buying distressed debt for pennies on the dollar, turn around and sue to recover up to ten times the purchase price.

Because vulture funds locate themselves in such offshore tax havens as the Cayman Islands, the companies or individuals remain a secret. Many times, there is no source of reliable information on who actually owns them, making accountability impossible.