After market storm, hedge funds launch to catch the recovery wave

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At least eight European hedge funds are launching portfolios betting on a recovery in corporate debt and emerging markets after the coronavirus pandemic triggered the biggest market rout in a generation.

FILE PHOTO: A screen displays trading information over the floor of the New York Stock Exchange in New York, U.S., March 18, 2020. REUTERS/Lucas Jackson

Fund managers and service providers told Reuters that seven hedge funds focused on credit and equities have either launched or plan to launch portfolios since the start of March while another credit fund got under way in the past few weeks. In the last week of March, investors pulled a record $109 billion out of bond funds followed by data provider Emerging Portfolio Fund Research. During the month, distressed debt and emerging markets strategies lost 13% and 9.6% respectively, according to data provider Eurekahedge.Now, firms are betting conditions are ripe for a rebound and are seeking assets left undervalued following the market rout.

Other funds that had planned to launch before the pandemic said they were still in full steam ahead, such as a London-based long-short hedge fund focused on emerging markets which aims to launch before the end of April.

 

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That is about two years away.

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