The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Is the game over for hedge funds?

Convertibles

Last year was a banner year for the European convertible bond market. Will the pace of growth be maintained this year? Or is the new-issue boom about to run out of steam?


The answer, as is the case in most areas of the equity capital markets at the moment, lies in the behaviour and attitude of the hedge funds. They have been the driving force in the convertibles market in recent months, buying up to 70% of all new issues. And they hold the key to future issuance.


It used to be the case that convertible bonds were bought almost entirely by Swiss-based funds and other defensively minded European fixed-income investors, who liked the idea of a bond with an equity kicker, combining downside fixed-income protection with a racy bit of equity option upside.


That's no longer the case. These days the convertible bond market is dominated by the hedge funds, which have injected liquidity and life into what was previously the epitome of the buy-and-hold Eurobond universe. The outright investors have taken a back seat as the hedge funds have dictated the pace in both primary and secondary markets.




You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree