Progress report
An assessment of hedge fund YTD performance in the face of renewed fears for a potential eurozone crash Read More
Against the backdrop of difficult market conditions and growing investor…
07/12/2011
With the financial world on red alert for eurozone sovereign defaults, lending markets have all but frozen in recent weeks, resulting in a pent-up demand for credit from institutions starved of funding.
As a result, investor interest in hedge funds in the credit space – including the return of distressed debt – is on the increase, with due diligence requests and searches being seen from institutional investors in particular. High levels of activity are expected in 2012, particularly if industry rumblings of US managers setting up European branches to access the credit space are to be believed.
This week, Muzinich & Co, a global institutional asset manager, announced plans to launch a new credit long/short fund next year. Meanwhile, the $9.2bn New Mexico Educational Retirement Board is poised to allocate about $300m across up to three hedge funds in the opportunistic credit area, while Scandanavian banking group SEB has disclosed a 2% allocation to the credit long/short space as part of its 2012 investment strategy.
Phillip Chapple, executive director at KB Associates, says that while investors have been looking intently at the European credit space, they are not opening their cheque books quite yet. “We have seen investors lining up three or four names they feel comfortable with in time for when the markets correct,” he explained. “Next year the European credit market could come down, many bank loans are due for refinancing or restructuring – there could be significant pressure on renegotiating terms.”
It seems 2012 could bring a host of difficult conversations that spell opportunity for hedge funds and their investors.
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31/05/2012
The next US HFMWeek Subscribers' Club breakfast, will take place on Thursday May 31. Join us and…
02/02/2011
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