An absorbing business for credit hedge funds

Analysts predict there will be a wave of consolidation in the credit hedge fund sector as battered funds look for ways to survive the market turmoil. Already a number of smaller managers have had to bow to the inevitable and merge with larger players. Sarfraz Thind reports

Predictions of lasting change are never far away in times of market crisis. The current credit crisis has already claimed a host of victims, including banks, long-only managers and, not least, credit hedge funds, and some believe that things will never be the same again. Markus Kroll, managing director at Zurich-based structured credit investment advisor, Palomar Capital Advisors, says that in the last year around 40% of the 200-odd structured credit funds in the company's database have