We expect liquid credit returns to decline due to low credit spreads and anticipated Fed easing. Direct lending returns should moderate but continue to outperform their liquid counterparts. Meanwhile, insurance-linked securities will continue to benefit from strong demand, and increased transaction volumes should support both specialty finance and credit opportunities managers. In emerging markets, currencies should become a tailwind for local bonds.
We view private credit as an underused and effective tool that can help a broad array of investors meet their objectives.
In this quarter’s update, we discuss prospects for a coming wave of defaults and bankruptcies, as well as the potential opportunity set for credit-focused hedge fund managers.
Third quarter 2019 proved to be the most challenging of the year for many hedge fund strategies. In this quarter’s edition, we discuss recent credit market developments and key sources that contributed to the challenging environment for credit-focused hedge fund strategies.
Major hedge fund strategies diverged in performance in second quarter 2017. In this edition, we examine the progress in the long/short equity space and challenges in the macro landscape.
With serious political risks and the possibility of contagion if left unresolved, a solution to the Italian banking crisis that avoids substantial hits to bank bondholders and creditors is likely.