Falling markets present hedge fund opportunities

28 January 2008 / by None
Current market volatility is creating some unique hedge fund opportunities, according to F&C Partners.

François Barthelemy, partner at F&C Partners has stated the firm's preference for "event driven and distressed" hedge funds as they look for value opportunities of which there are currently many.

He pointed out that mid cap stocks have been decreasing dramatically during the past months, but the fact that they have "outperformed" in the last few days proves that the current market turbulence is limited.

Mr Barthelemy also noted that due to several marginal US investors pulling out of the market, F&C can gain much better margins from their lending strategies.

Commenting on this situation, he said: "By selecting those which have no balance sheet problems one can pick good investment opportunities even in a weak consumer environment."

According to Mr Barthelemy, this is also a good time to invest in credit assets, leveraged loans and high yield bonds as the next two years should provide substantial returns.

Elsewhere, F&C has predicted that the impact of the SocGen bank fraud news is likely to be short lived.

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