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By Beverly Chandler, Opalesque London:

August 2011 saw the launch of the CQS European Distressed fund, managed by Simon Finch, based in the UK and Mark Unferth, based in New York. CQS had already been trading in a broad range of distressed investments across their other funds but as Finch explains, there was a consensus that the opportunity existed for a specific European Distressed fund. "There was a feeling that in this new cycle, the opportunities would be larger so they were worthy of a separate fund."

The fund was initially seeded with $42m from existing CQS investors and it is now through the $100m bracket. Finch says: "We have a lot of expertise with groups looking at loans and asset backed securities across Europe and people looking at financials, convertibles – almost all of the asset classes."

The cycle this time round combines both cyclical aspects occurring at the same time as a structural shift from bank lending to bond market issuance in Europe. This is more akin to the structure in the US. Finch says: "We have a higher amount of bank rather than bond financing in Europe. Banks often kept companies alive for longer and it was in their interest to amend and extend to give corporates another chance. It’s a structural change that has to go on, as opposed to only a cyclical one."

Finch believes that while the outlook for Europe remains uncertain, you have to have the widest possible array of tools in the bag. "The......................

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