Distressed Debt Funds Continued Gains

Distressed Debt Funds Continued Gains

The View

Charts Distressed Debt Funds Continued Gains

BlogKMC-copy Distressed Debt Funds Continued Gains

Article written by Ken Carmody.

Eurekahedge reports that Distressed Debt Funds made their tenth consecutive month of gains in July. Returns for the year to date are marked at 11.5%, such returns for this niche have not been seen since 2009.

These type of funds generally make short-term plays on near-default or defaulted bonds, make emergency loans, and in some cases takeover delinquent borrowers via the courts. This strategy has quickly come to fruition due to the rapid market recovery catalysed by government spending and assertive central bank manoeuvres and stimuli along with swift vaccination programmes.

Debt Distressed Debt Funds Continued Gains

Several distressed debt hedge funds have garnered returns of up to 26.2 per cent in the year up to the end of May. These returns have of course been sustained by a significant rally across corporate debt markets. This has resulted in lowered borrowing costs which have been crucial in helping cruise lines, hotel groups, air carriers, and others raise billions of dollars to keep themselves afloat.

As we reach the third quarter of 2021 there are investors looking beyond debt for returns for example UBS’s hedge fund investment unit have recently trimmed its exposure to distressed debt. Also, Preqin recently reported that some investors have “cooled their interest in distressed debt and special situations compared to last year as opportunities proved harder to come by than expected”.

Regardless, plenty of distressed debt specialists raise and deploy money consistently in any cycle, and assert that there will be adequate opportunities due to aftershocks created by the pandemic.

IF​ ​YOU​ ​WOULD​ ​LIKE​ ​TO​ ​LEARN​ ​MORE​ PLEASE​ ​DO​ ​MAKE​ ​CONTACT​ ​AT MKT@FINSCOMS.COM

 

Survey Records High Levels of Optimism for the Global Economic Recovery

Survey Records High Levels of Optimism for the Global Economic Recovery

The View

bull-1024x683 Survey Records High Levels of Optimism for the Global Economic Recovery

BlogKMC-copy Survey Records High Levels of Optimism for the Global Economic Recovery

Article written by Ken Carmody.

PwC surveyed 5,050 CEOs mainly within organisations with revenues ranging from $100m to over $25b in 100 countries and territories in January and February 2021. The bottom line is that 76% of these global business leaders predict that economic growth will improve in 2021. The PWC Annual Global CEO Survey shows optimism is especially prevalent in North America and Western Europe, with 86% and 76% of CEOs, respectively, from these regions anticipating improved global growth in the year ahead.

The PwC Annual Global CEO Survey certainly tallies with our own straw poll within the Finscoms investor network and is a great boon as we prepare for busy investment quarters ahead.

Here are our main takeaways:

The survey also highlights increased CEO confidence in revenue growth matching the long-term average. There is a wide variation seen across industries, reflecting the varying degrees to which consumer behaviour has ultimately been impacted by the global pandemic. CEOs within the technology and telecommunications sectors show the highest levels of confidence at 45% and 43%, respectively. Whereas, CEOs in the transportation and logistics (29%) and hospitality and leisure (27%) sectors are among the least confident about their chances of growing revenues over the next 12 months.

Interestingly, the survey findings also show that the US has increased its lead as the number one market for CEOs looking for growth over the next 12 months at 35%, seven percentage points ahead of China at 28%. In 2020, this is a six percent extension between the US and China in the favour of the US.

It is noted that US CEOs have bolstered their emphasis on Canada and Mexico as they move away from China. This is mainly due to new political developments and existing tensions. And on the other side of the coin, China CEOs report growing interest in large economies such as the US, Germany and Japan as prime destinations for exports.

At 17%, Germany stays in third place on the list of growth destinations. The UK, post-Brexit, moves up to number four (11%), overtaking India (8%). Japan also rises up the ranking to become the sixth most attractive growth destination, surpassing Australia.

IF​ ​YOU​ ​WOULD​ ​LIKE​ ​TO​ ​LEARN​ ​MORE​ PLEASE​ ​DO​ ​MAKE​ ​CONTACT​ ​AT MKT@FINSCOMS.COM