The term "vulture fund" refers to a hedge fund that buys debt on the secondary market for pennies on the dollar and then sues the debtor (usually a sovereign nation) for full repayment of the original loan plus interest. "Vulture funds" are usually secretive and are often based in offshore tax havens like the Cayman Islands. In some cases, there is no information on who actually owns them.
"Vulture funds" have been known to target the cheap debt of poor or financially-distressed countries. Poor countries that are eligible for debt cancellation are especially vulnerable. "Vulture funds" have been known to track the debt relief process, buy the debt of nations about to receive debt relief and then sue the country after it has received a windfall of resources thanks to debt cancellation.
If you’re interested in obtaining more information about “Vulture Funds” and their harmful impact on heavily indebted countries, contact Kate Zeller by email at [email protected] or by phone at (202)783-3566 x 105.
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"Vulture Fund" Case Studies: