Having run one once....
Vulture funds are great for the American economy. We buy unwanted stuff that nobody else can buy ... bonds in default, bankruptcy claims, busted converts, bonding facilities, detritus from broken structured finance products, etc.. Someone has o buy this stuff to get it off the books of people who can't hold it. There is a global market in distressed trash that is easy to buy for pennies on the dollar. If you can hold onto it, sometimes you can get back many multiples of what you paid for it. Unfortunately, it is ofren hard to get leverage on this stuff as your prime broker doesn;t like defaulted bonds as collateral. You get money from qualified investors like any other hedge fund.
I don;t know what you mean by backed by the justice system but vulture funds are surely not doing anything illegal or unethical any more than you would be by going to a yard sale being held by a divorcing couple or something. It;s really the same concept - you make money on someone else's pain but they are glad you are there.
where do they get the money from? where do they invest?are they a threat for US economy? are they backed by the justice system?
