Illustration: David Simond
After the best year in its brief history in 2003, and with fundamentals continuing to improve in 2004, the European high-yield market abruptly nose-dived in May, although it has since recovered much of the lost ground. Long-only investors blamed newly arrived hedge funds for the volatility. But were they really to blame?
The European high-yield market had been enjoying the longest bull run in its short history. Last year saw returns of around 30%, and €16.3 billion in ne