Vulture funds and international debt relief

Over the years, concerns have been expressed that vulture funds are wiping out the benefits which international debt relief was supposed to bring to poor countries. But then, what are vulture funds? Generally, a vulture fund is an investment fund which profits by buying debt from a nation, company or individual at a discounted price on a secondary market. The said nation, company or individual will typically be in financial distress, thus, rendering it incapable or too distressed to meet its debt payment obligations to the creditors. So, the vulture fund will step in to buy the debt at a discounted price and then subsequently sell it a higher price than it purchased that debt for. In my book, Contemporary Issues in International Law, published by Pretoria University Law Press (2021), I have examined in greater detail pertinent aspects of illicit financial outflows that include vulture funds and their role in exploiting financially distressed nations. In this article, I step back to provide a summative exploratory study of vulture funds only, and not any other forms of illicit financial outflows discussed in my book.