The credit crunch has financial sponsors scouring for new sources of financing. They may have found their answer-- hedge funds. While funds have been buying leveraged loan-backed debt for a while, the latest, according to Investment Dealers' Digest, is for them to get involved in deals as more direct lenders. GSO Capital Partners and Farallon Capital Management provided $500 million in senior subordinated financing to support Hellman & Friedman's $25.60 per share purchase of Goodman Global recently. This trend was underway even before the credit crunch fully hit. We'll likely see more of this.

For more:
- here's the Investment Dealers' Digest article