Steve Ketchum is not happy. The hedge fund manager is a big investor in so-called leveraged loans, a corner of the debt market that involves lending to riskier, lower-rated companies.

Ketchum believes in the asset class. It makes up the bulk of the US$21 billion ($31.4b) his firm manages. But he worries that heavy-hitting private equity firms are sabotaging the market by relaxing terms on the loans they are foisting on to investors.

"At some point they could kill the golden goose," he warned from his Park Avenue offices in New York. "If they push for more toxic loan structures

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