Distressed debt hiring falls short of expectations

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Distressed debt hedge funds are all the rage, but recruiters say the pace of hiring in the sector is more akin to a stroll than a stampede.

"We're seeing quite a lot of activity," says Luke Williams, a consultant at search firm Kinsey Allen. "There are a lot of funds marketing themselves as credit special situations funds, and they're looking for good solid credit analysts to work across the investment spectrum. But there's less going on in distressed debt than 12-18 months ago."

The alleged hiring languor in London comes despite the appearance of several high profile new distressed debt funds in the US. For example, Reuters reports today that HSBC Halbis Partners has launched a distressed debt hedge fund to exploit opportunities created by rising corporate default rates this year. Similarly, KKR, the giant US buyout group, recently announced plans for a distressed debt hedge fund.

Another London headhunter specialising in the hedge funds sector confirmed the dearth of distressed debt activity. "We're really busy at the moment, but we've got absolutely nothing going on in distressed debt at all," she says. Instead, she says most of her roles are for asset raising staff: "We're absolutely swamped on the distribution side. It's the beginning of the year, and all the funds need to get assets in."