Convertible bonds endured a terrible end to 2008, but now there are signs things are beginning to look up again. And, perhaps more surprisingly, there's some hiring going on.
"The disappointing absolute performance of the asset class has its benefits as it now offers very attractive investment opportunities with limited risk and attractive upside potential in the wake of the sell-off," reckons Anja Eijking, manager of the F&C Global Convertible Bond Fund.
Convertibles fared badly last year, losing 27% through a combination of equity market declines, widening credit spreads and forced selling from hedge funds.
"Since then, the market has stabilised with an improvement in financing, liquidity, and the emergence of non-traditional buyers," Nadeem Walji, founder of US hedge fund manager Duma Capital Partners told Financial News.
And some firms are starting to bolster their trading teams.
"Bigger players are looking for experienced traders or taking the opportunity to upgrade," says one headhunter. "Then there are the start-up operations and niche firms who are also recruiting traders."
Hedge fund manager CQS is said to have recently recruited Alex Schoenberger from UBS for its convertible bonds fund. Credit Suisse is reputedly recruiting a "handful" of senior convertibles traders, and Citi are also rumoured to be looking for a convertibles trader. A mysterious 'Indian boutique' is also said to be hiring.
Asset managers launching convertible bond funds this year include Aviva Investors, BlueBay Asset Management and Capital International.