European Distressed Debt Drives Up Credit Hedge Funds

As debt-laden European countries, specifically those in the peripheral region strengthen to recovery, distressed asset investments are bearing fruit in the region. Credit Suisse Hedge Fund Index has netted a 7.03% YTD, whereas the Distressed index has gained close to double in the same period. The sub-strategy is up 12.05% YTD after adding a 1.5% return in October.

As we have noted on several previous instances, hedge funds have been grabbing any available assets, which are at times highly risky. The alternative lending space where traditional lenders like banks have moved out, is particularly popular among such investors. Hedge funds also...