Private Special Situations

Free CFA Level III: Private Markets lesson in Private Special Situations. 22 min read, ~3,254 words.

Special situations spans distressed debt, rescue financing, restructurings, litigation-driven trades, and dislocation plays. Returns are event-driven (a catalyst), not yield-driven, targeting 15-25% net IRR. Distressed debt trades at deep discounts to par (often 30-70 cents) with recovery resolved through bankruptcy or out-of-court workout. The fulcrum security converts to controlling equity...

What this lesson covers

• Content
• Example 1
• Example 2
• Common Mistakes
• Check Your Understanding
• Exam Shortcuts

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