We've noted that a lot of private equity funds have no choice but to shift their emphasis to distressed debt. The latest: Goldman Sachs' $15 billion PE fund is asking investors for approval to target debt with the invested portion of the fund. Goldman faces some thorny issues.

The Financial Times notes that it "will potentially be pitting itself and its investors against some of its best clients, the private equity firms controlling these highly indebted companies." That assumes that it, as a buyer of distressed debt, will aim to ultimately control the issuing company when it defaults. But Goldman is not known for hostile maneuvers and few think it will come to that. Some of the money will go to portfolio companies, a move that makes some PE limited partners nervous. 

For more:
- here's the article

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