Distressed-debt investors are actively raising funds, betting on a potential once-in-a-generation buying opportunity amid turmoil in the private credit market. Strategic Value Partners, managing $21bn, is among those studying software investments despite uncertainty. Founder Victor Khosla stated the cracks in credit markets are here to stay, calling it 'biggest opportunity since 2008'. This shift follows recent private credit stress, including redemptions and questions about exposure to struggling software companies. Marblegate Asset Management founder Andrew Milgram echoed the sentiment, claiming he couldn't 'imagine God would smile on me like this' while raising a new distressed-debt fund. The sector's troubles stem partly from private equity firms struggling to sell assets and return cash to investors, compounded by AI-driven fears of obsolescence for software borrowers.

The distress extends beyond assets. Hedge fund Millennium Management is expanding in Jersey to accommodate staff fleeing Dubai due to safety concerns from Iranian drone attacks and the collapse of its tax haven status. While the firm explores alternatives in Europe and Asia, the situation highlights how geopolitical risks are reshaping corporate real estate strategies. Meanwhile, investors remain hyper-vigilant to Donald Trump's policy pivots on the Iran war, driven by oil market volatility. Deutsche Bank's Maximilian Uleer developed a 'pressure index' tracking Trump's approval, inflation, market performance, and yields to predict potential administration adjustments. With the index near its highest since Trump's re-election, the market waits for the next 'Taco' moment, though many investors remain paralyzed by uncertainty.

Investors hunting for bargains are also eyeing potential policy shifts from Trump, though the hedge fund CIO admits 'we're all doing the same thing — nothing' amid fears oil could spike to $150 or the war could end abruptly. Larry Fink warns AI risks widening inequality, while Victor Khosla's 'once-in-a-generation' call underscores the unique timing for distressed-debt strategies in a potentially cooling market.