The amount of money being raised by private equity funds for investing in distressed debt is set to outstrip last year’s record as investors increasingly look to bet on troubled companies as the next big opportunity.

Private equity funds raised $39.7bn for distressed debt investing last year, more than ever before. But 2008 is expected to soundly beat this record, with $32.8bn raised already and a further $21.4bn being sought by fund managers in current investor roadshows, according to data compiled by Private Equity Intelligence, an independent research group.