Professionals looking to diversify their experience or strike new ground in distressed debt should start paying close attention to the European Debt Crisis.  As the European Debt Crisis slides into its 4^th year, more investment professionals from all over the world are founding hedge funds that specialize in distressed debt and are looking to invest heavily in Europe.  Warwick Capital Partners, LLP is just one investment fund that has launched a European distressed debt fund.  The fund, which was launched in October as a “fund of one” with $200 million from an unspecified European investor, reported their assets under management at about $750 million during their first week of operation.  More recently, London-based Eyck Capital Management LLP launched their distressed debt vehicle, Eyck European Tactical Distressed Opportunities.  The fund is targeting returns of 12 -15% a year.

From these recent trends spinning off from European debt, it is probable that the number of European-based and other international hedge funds, similar to Warwick and Eyck, will increase in numbers; something job seekers should pay close attention to.  In fact, Deutsch Bank’s 2013 Alternate Investment Survey found that 36% of investors surveyed anticipate that Western Europe is 1 of the top 3 regions that will perform the best in 2013.  The data collected concludes that Western Europe is forecasted to perform the second best – trailing behind the United States/Canada – out of all 14 regions selected by investors.  This puts Western Europe in the top 5 of this list for the first time since Deutsche started asking this question in 2008; thus showing a significant positive shift in the general investor outlook associated with the European crisis.

As a result, we anticipate that in order to generate funding, these distressed debt hedge funds are going to peruse the US market for investors, which in turn will create opportunities for US investment relations and marketing/sales professionals.  “We’re expecting to see these internationally-based hedge funds set up satellite offices in the United States, and these offices will need professionals who understand American investors and have a strong ability to position the European debt market as an attractive and worthwhile investment,” says Mitchell Peskin, Partner and Executive Vice President at The Execu|Search Group.   As more money pours into these hedge funds, there will be another surge in demand for investment professionals; specifically for more investment analysts and traders.

It’s clear that a growing number of international hedge funds now view the European Debt Crisis as an opportunity to earn generous returns rather than a bad investment.  To successfully do this, they are going to need to secure financial backing from investors who will be willing to invest in debt in promise of a high return.  Therefore, as distressed debt funds expand, they are most likely going to need to look outside of Europe and penetrate untapped markets such as the United States for investors.  If this happens, highly articulate investment relations, marketing/sales professionals, analysts, and traders that can fully understand these investments will be in high demand.   Opportunities that may spin off from these newly created positions could possibly include overseeing US funds structured in credit investments.