Fundamental Credit: The Good, The Bad & The Performance

Over the past year, credit managers were positioned for an opportunity set that has failed to materialize. In 2019, investment opportunities in distressed credit were limited.

While we witnessed an increase in market volatility, several blue-chip funds and asset managers remained poised for a turn in the credit cycle, unable to take advantage of short term opportunities. Long-short credit managers had a strong performance in 2019 relative to previous years, with the maority of funds outperforming their distressed-focused peers. Many credit funds have recently experienced sustained performance headwinds, fee compression and increased competition for talent from Private Equity firms. In order to combat these challenges from a human capital perspective, funds have decided to revise their hiring process.