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He was highly leveraged, having already bought the house in Connecticut, and found himself borrowing against his children's trust funds.
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Investing in hedge funds can be lucrative, but it is also risky: the funds, many of which are highly leveraged, have a tendency to implode when their investments turn against them.
These guys are pioneers of the leveraged buyout, having begun their businesses in the 1970s and prospered through the glory days of the '80s.
In the Bank for International Settlements' September 2018 quarterly review, data demonstrated that U.S. and European leveraged finance, comprised of high-yield bond and leveraged loans, has doubled in size since the global financial crisis.
"That's because leveraged investors had to sell their munis".
The sport's most leveraged megamillionaires have enthusiastically acquiesced.
Leveraged buyouts have been controversial, especially since layoffs and other cost-cutting frequently followed the buyout.
Moreover, the fund was not leveraged; it had not made its bets using borrowed money.
But leveraged buyouts have less flexibility to weather falling revenue because of their high debt levels.
Investors are also nervous when highly leveraged companies have little equity in their portfolio, he said.
Returns on leveraged loans have lagged behind those achieved by high-yield bonds this year.The problem is indigestion.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com