The oil slump is drawing interest from some of the savviest bargain hunters on Wall Street.
Veteran hedge-fund manager Wilbur Ross, Blackstone Group LP’s GSO Capital Partners and Apollo Global Management LLC are among those raising funds to buy the battered stocks, bonds and loans of energy firms following a 54% decline in New York crude prices since June.
More traditional investors like Western Asset Management Co. and Seix Investment Advisors LLC also have started funds to help large clients such as endowments and pension funds to place bets on the ailing energy industry.
Oil’s plunge to six-year lows has spurred an exodus from the securities of companies that explore for, produce, transport and refine oil and gas. The carnage is creating an opening for distressed investors, who snap up cheap stocks and bonds of troubled companies, seeking to profit when prices rebound or to use the investments to take the companies over in bankruptcy.