2025 Sohn Montreal: Davidson Kempner’s Suzanne Gibbons – Identifying Alpha Opportunities in Fragmented European Credit Markets

At the 2025 Sohn Montreal Conference, Suzanne Gibbons, Partner at Davidson Kempner and head of the firm’s Global Research team, outlined why Europe’s fragmented, undercapitalized credit markets offer compelling opportunities for investors willing to navigate inefficiencies and bank retrenchment.

• Background: She specializes in U.S. investment-grade credit markets. Suzanne Gibbons has a U.S. background in opportunistic credit. Recently, she has focused on dispersion and European market opportunities, which led to the publication of a white paper.
• Firm Focus: Davidson Kempner’s view on Europe contradicted the peak pessimism observed at the end of the previous year, as they were seeing exciting opportunities. They are described as flexible capital providers.
• Time at Firm: She joined the Firm in 2007.

2025 Sohn Montreal Conference – Davidson Kempner’s Suzanne Gibbons

Introduction by Adam Farstrup of Schroders

• The speaker’s team includes 140+ people globally, focused on macroeconomic investing.
• Their work centers on understanding:
  • What drives the global economy
  • Where we are in the business cycle
• The past four years have been spent studying a regime shift in the global economy.
• Investors need to rethink biases embedded in models and portfolio decision-making.

Key trends and macro observations, according to Schroders

• Global dispersion is a key trend.
• Reference to Seth discussing Japan.
• Central banks are shifting focus toward more traditional economic drivers, due to inflation pressures.
• As economies return to orthodox monetary policies, policy dispersion creates opportunity.
• Despite that, uncertainty exists, making it hard to take big macro bets.
• Strategy: pair macro view with bottom-up approach.
• Macro calls on Japan or Europe are difficult.
• But bottom-up fundamentals reveal significant opportunities, particularly in Europe.
• Reference back to hockey analogy:
  • Several successful NHL teams are from south of the Mason-Dixon line, which is odd from a top-down view.
  • However, 43% of those teams are actually Canadian players.
  • Jokes Trump-era immigration policy might “make Canadian hockey great again.”

Introducing Suzanne Gibbons

• Suzanne Gibbons is a partner at Davidson Kempner.
• Specializes in U.S. investment-grade credit markets.
• Recently focused on dispersion and European market opportunities.
• Final statistic before handing it off:
  • In the U.S., banks supply only ~⅓ of capital going into the economy.
  • In Europe, 70–80% of capital comes from banks.

Davidson Kempner

• Introduces herself as partner and head of research.
• End of last year marked peak pessimism for Europe:
  • European equity markets at the 100th percentile discount to U.S. markets, based on 35 years of data.
• This contradicted Davidson Kempner’s view ; they were seeing exciting opportunities.
• Led to the publication of a white paper.

Key observations from research

• Fragmentation and market inefficiencies in Europe create opportunities for flexible capital providers.
• Looking past Europe’s beta underperformance vs. the U.S. over 25 years reveals alpha in public and private equity and credit markets.
• With a U.S. background in opportunistic credit, Gibbons found some takeaways surprising.