Most vulture funds are formed by the mutual fund industry as a way around SEC restrictions from participating in the FI-originated loan sales market.

Question

Quizplus · Accepted Answer

Vulture funds are typically formed by distressed debt investors or private equity firms, not the mutual fund industry. While some mutual funds may invest in vulture funds, the funds themselves do not typically form vulture funds. Furthermore, there are no SEC restrictions on mutual funds participating in the loan sales market.

Most Vulture Funds Are Formed by the Mutual Fund Industry