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(Bloomberg) -- Tom Einhorn, the global head of an event- driven group at UBS Group AG, is leaving the bank to start a hedge fund that will invest in distressed debt, according to three people with knowledge of the matter.

Einhorn, who traded distressed securities in New York for the Swiss firm, departed the bank today, said the people, who asked not to be named because they’re not authorized to speak publicly.

Dealers from UBS to Royal Bank of Scotland Group Plc began rebuilding their ranks to trade junk-rated debt last year to capitalize on gains in the fixed-income market after gutting credit units following the 2008 financial crisis. UBS added three employees to Einhorn’s global event-driven opportunities group in 2014, including Nick Gustafson, Musaab Javed and Monica Ugidos.

Einhorn is joining a wave of traders who’ve left Wall Street for hedge funds in order to take advantage of the expectation that defaults will begin rising next year, creating distressed-debt investment opportunities.

Megan Stinson, a spokeswoman at UBS, declined to comment. Speculative-grade bonds are rated less than Baa3 at Moody’s Investors Service and below BBB- by Standard & Poor’s. Distressed securities typically trade with yields more than 10 percentage points than government benchmarks.

Oaktree Capital Group LLC, the world’s biggest distressed- debt investor, sought $10 billion for a new fund focused on that slice of the credit markets, people with knowledge of the matter told Bloomberg News in September. Fortress Investment Group LLC began seeking money to raise $4.3 billion for distressed credit investing last year, other people told Bloomberg in October.

To contact the reporters on this story: Laura J. Keller in New York at lkeller22@bloomberg.net; Lisa Abramowicz in New York at labramowicz@bloomberg.net To contact the editors responsible for this story: Shannon D. Harrington at sharrington6@bloomberg.net Richard Bravo, Mitchell Martin

Bloomberg