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From Komfie Manalo, Opalesque Asia:
The dislocation of the European markets caused by the sovereign debt problems of Greece, Spain and Portugal has created a range of opportunities in the corporate sector, allowing managers to take advantage of relative mispricing, participants in the June-2010 Opalesque U.K. Roundtable said.
"We believe that the dispersion and yields present as a result of these sovereign dislocations will result in significant opportunities for mean reversion and compression pair trades. We have been managing money for a while and have seen this part of the credit cycle before - we believe we are now in the sweet spot of upgrades versus downgrades, and of spreads going tighter over time," said Louis Gargour, Founding Partner and CIO, LNG Capital, a London-based absolute return asset management firm.
Gargour explained that the European credit trends are still positive and continue to be an interesting asset class. He sees opportunities in relative value, event driven, and distressed strategies. According to him, the key factors that would drive returns are:
1. The dislocation and opportunities caused as a result of the Greek crisis,
2. An improving credit cycle, with upgrades outstripping downgrades,
3. Underperformance of equity markets relative to bond mar...................... To view our full article Click here
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