Junk dump
Just what caused the bottom to drop out of the high-yield market in May? Some blame a glut of new issuance from cable companies while others, especially long-only investors, point the finger at hedge funds. Julian Evans reports
Illustration: David Simond
After the best year in its brief history in 2003, and with fundamentals continuing to improve in 2004, the European high-yield market abruptly nose-dived in May, although it has since recovered much of the lost ground. Long-only investors blamed newly arrived hedge funds for the volatility. But were they really to blame?
The European high-yield market had been enjoying the longest bull run in its short history. Last year saw returns of around 30%, and €16.3 billion in
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