Vulture funds believe British companies will offer the best investment opportunity in Europe this year, as the country faces a sharper slowdown than its European neighbours.
A poll of the funds, which invest in financially distressed companies, ranked the UK ahead of Germany, France and Russia.
The survey of 100 investors by Debtwire, a news service owned by the Financial Times Group, found that they did not expect the number of European corporate debt restructurings to peak until the end of this year.
Vulture funds – largely made up of European and US hedge funds, proprietary trading desks of banks and longer-term, private equity investors – are expected to become increasingly active this year.
Their interest in the UK is driven in part by its bankruptcy regime, which is friendlier to creditors than many European countries, as well as the expectation of a high number of distressed companies.
A third of those polled believe liquidations, such as the one at Woolworths, will become commonplace this year.