Debt vultures, otherwise known as vulture funds, are a type of creditor which seeks out countries in crisis whose debt they can buy up at rock bottom prices. Then they use legal action – or the threat of it - to seemingly strong-arm countries into making large debt repayments, delivering themselves vast profits.
These are some of the debt vultures that are cashing in on the debt crisis.
VR Capital
VR Capital was set up to deal with ‘distressed debt’ in the wake of the Russian financial crisis of 1998. The debt vulture reportedly manages over $8 billion of assets. It has a history of using what appear to be bullying tactics to force countries in crisis into deals that will deliver it huge profits.
In recent months, VR Capital has acted alongside other debt vultures to secure a deal with the Ukrainian government that will see it paid $3.7 billion on debt with an original value of $2.6 billion. This is twice as much as other lenders received.
VR Capital, alongside Farallon Capital, used the threat of litigation with Ethiopia, but they were blocked by other lenders and now they are suing the Ethiopian government through the UK courts. [1]
It’s not the first time the debt vulture seems to have strong-armed lower-income countries into bad deals. In 2018 it bought up some of Mozambique’s debt, at the height of the hidden debt scandal [2] and when a case had already been brought showing that the loans were illegal under Mozambican law – and then sued for huge profits. In the end, the Mozambique government agreed an out of court settlement of $12m with VR Capital.[3]
VR Capital is also among a group of bondholders currently pursuing the Greek government through the courts. Greece bought back some of its debt in 2025 from VR Capital and other creditors, but they are challenging the amount paid by the government – if VR Capital and the other creditors can keep hold of the debt, the Greek government will have to pay them more interest from 2027.[4]
These debt vultures seem to prey on countries in crisis in the name of profit. And those at the top are clearly doing well for themselves: the founder and president of VR Capital bought a mansion in Kensington and Chelsea from the Greek government during the Greek debt crisis in 2013 for a whopping £23 million.
Sources
[1] Financial Times, Bondholders prepare to sue Ethiopia over $1bn debt default, https://www.ft.com/content/d7cbddda-5005-4c60-8bc8-0555099a470c
[2] Bloomberg, Hedge Funds Enter Credit Suisse Bribery Fight With Mozambique, https://www.bloomberg.com/news/articles/2021-02-10/hedge-funds-enter-credit-suisse-bribery-fight-with-mozambique
[3] Centro de Integridade Publica, Cost and Consequences of the Hidden Debt Scandal of Mozambique, https://www.cipmoz.org/2021/05/27/costs-and-consequences-of-the-hidden-debt-scandal-of-mozambique/
[4] Bloomberg, Greece Faces Investor Fight Over Buyback of Debt Crisis Warrants, https://www.bloomberg.com/news/articles/2025-08-22/greece-faces-investor-fight-over-buyback-of-debt-crisis-warrants?
Farallon Capital Management
Farallon Capital Management is a debt vulture with a history of suing countries in crisis.
Alongside VR Capital, Farallon has been leading debt negotiations with the Ethiopian government on behalf of Ethiopia’s private lenders.
In October 2024, Ethiopia made a generous offer to private lenders – which they rejected. The debt vultures then threated to sue Ethiopia, seemingly bullying them into offering more lucrative terms.[5]
Ethiopia made an even more generous offer in October 2025, which Farallon and VR Capital once again rejected – again threatening to sue through the UK courts.[6]
In January 2026, the Ethiopian government offered a deal that would have seen private lenders repaid 28% more than Ethiopia’s other lenders – and 50% more than if they had lent to the US government. China and France rightly blocked the deal, on the basis that private lenders weren’t offering enough debt relief.
Now, the debt vultures are suing Ethiopia through the UK courts.[7]
Previously, in 2021, Farallon Capital Management and VR Capital sued the Mozambican government in the UK for defaulting on one of Mozambique’s hidden debts, that owed by state-owned company Proindicus.[8]
In 2024 Mozambique settled out of Court with VR Capital and Farallon Capital Management, alongside UBS/Credit Suisse and other owners of the debt. Mozambique agreed to pay VR Capital $12 million and Farallon $15 million.
Farallon Capital Management is rated by Forbes as one of the world’s top 20 hedge funds, having made an eye-watering $45.8 billion in profit since they were set up.[9] The current Executive Chair, Andrew Spokes, owns a $10 million mansion in San Francisco.[10]
Sources
[5] Financial Times, Ethiopia bond investors accuse IMF over debt relief, https://www.ft.com/content/40c35ffd-fa86-445f-9c4c-dc434b61de25
[6] Reuters, Ethiopia’s debt restructuring hits impasse, bondholders eye legal action, https://www.reuters.com/world/africa/ethiopias-debt-restructuring-hits-impasse-bondholders-eye-legal-action-2025-10-14/
[7] Financial Times, Bondholders prepare to sue Ethiopia over $1bn debt default, https://www.ft.com/content/d7cbddda-5005-4c60-8bc8-0555099a470c
[8] Debt Justice, UK court rules that Mozambique is owed over 2 billion in hidden debt case, https://debtjustice.org.uk/news/uk-court-rules-that-mozambique-is-owed-over-2-billion-in-hidden-debt-case
[9] Forbes, Hedge Fund Billionaire Chris Hohn’s TCI Profited By A Record $18.9 Billion In 2025, https://www.forbes.com/sites/hanktucker/2026/01/18/hedge-fund-billionaire-chris-hohns-tci-profited-by-a-record-189-billion-in-2025/
[10] Business Insider, A hedge fund just bought a San Francisco mansion, (paywalled) https://www.businessinsider.com/a-hedge-funder-just-bought-a-san-francisco-mansion-after-a-5-million-discount-2012-4#now-check-out-the-biggest-sale-of-2012-so-far-9
Aurelius
Aurelius Capital Management and VR Capital led a group of lenders who sought large payments through restructuring one particular part of Ukraine’s debts. Known as the “GDP-warrants”, the debts were created during Ukraine’s last restructuring in 2015 and allow for large increases in payments if there is economic growth – but no corresponding fall in payments when growth falls.
Having collapsed in 2022 after the Russian invasion, the Ukrainian economy began growing again in 2023. As a result, the debt payments due skyrocketed.
The Ukrainian government was able to agree new terms on their debt agreements with most of their lenders. But the vulture funds refused, instead seeking almost three times more than the other lenders.[11]
As a result of the devastating impact of the Russian invasion, Ukraine defaulted on these particular debts in June 2025.[12]
Ukraine was keen to reach a deal with Aurelius and VR Capital and apparently feared being sued through the UK courts once the war was over.
In December 2025, the Ukrainian government agreed to pay the vultures $3.7 billion on a debt with an original value of $2.6 billion.[13]
Aurelius Capital Management and VR Capital have been paid more than twice as much as the other lenders received. During the negotiations, debt vultures also negotiated terms with the government that will double the amount owed by Ukraine if it defaults again – considered likely, given the precarious situation in the country.
In Argentina, Aurelius is still pursuing the government after the country defaulted in 2002. The Argentinian government reached a restructuring agreement with most creditors in 2005 – but instead of taking part, Elliot Management and Aurelius pursued Argentina in the courts for a decade.[14]
In 2012 Elliot Management and Aurelius won a US Court ruling which said they should be paid in full, or Argentina would not be allowed to pay anyone. Argentina then defaulted on its debt again.
After a change in government in 2016, Argentina agreed to pay the vulture funds in full. But Argentina could only pay the debt by borrowing more, which led to another debt crisis and debt restructuring in 2019.[15]
Elliot Management bought the debt they owned for $117 million and were paid $2.4 billion [16] – that’s over 141 times more money than they originally spent a profit of over 2000%. Aurelius’ cases against Argentina continue to this day.
Aurelius was set up by Mark Brodsky, a lawyer who previously worked for Elliott Management. When asked by an interviewer if he thought his legal claims on Puerto Rico’s debt were worth fighting for, when it pitted him against people struggling to get back on their feet, Brodsky said the thought hadn’t occurred to him. “I’m paid to make money for my investors,” he said, “not lose it.”[17]
Sources
[11] Bloomberg, Ukraine fails to reach deal to restructure $3.2 billion debt, https://www.bloomberg.com/news/articles/2025-04-24/ukraine-fails-to-restructure-warrants-with-hedge-fund-led-group?
[12] The Kyiv Independent, Ukraine defaults on GDP-linked sovereign debt payment, https://kyivindependent.com/ukraine-defaults-on-gdp-linked-sovereign-debt-payment/
[13] Financial Times, Ukraine strikes deal to restructure $2.6bn of growth-linked debt, https://www.ft.com/content/bae2c449-7fc7-45d8-b86d-81534858144c
[14] BBC News, Argentina loses $1.3bn debt court appeal, https://www.bbc.co.uk/news/business-23832247
[15] Debt Justice, Argentina debt crisis inevitable failure of IMF bailout, https://debtjustice.org.uk/press-release/argentina-debt-crisis-inevitable-failure-of-imf-bailout
[16] Washington Post, How one hedge fund made 2 billion from Argentina’s economic collapse, https://www.washingtonpost.com/news/business/wp/2016/03/29/how-one-hedge-fund-made-2-billion-from-argentinas-economic-collapse/
[17] Bloomberg, Hated by many, distressed debt brawler isn’t about to back down, (paywalled) https://www.bloomberg.com/news/articles/2018-06-04/hated-by-many-distressed-debt-brawler-isn-t-about-to-back-down