Asset management chief predicts more weakness in credit and equity markets in 2009

CIO and founder of City-based Ilex Asset Management, Simon Thorp, says: “We have been negative on credit (and other financial markets) since July 2007 expecting that the combination of falling house prices in the US and a freeze in the banking sector would eventually spill over to the broader economy both in the US and elsewhere.

“We have been surprised that this message has only just been received by equity markets (S&P 500 was trading on a PE of 25 in mid-September).“

Thorp adds: “We expect European default rates to hit 10-12% next year and H1 2009 to be a period of further weakness in credit and equity markets. In H2 2009 we expect markets to begin to recover with credit markets (loans and bonds) leading the way.

“We measure the performance of our main fund against the JP Morgan European HY Index which is -23% YTD. ICF is +4% at the time of writing“.


Ilex Asset Management runs two total return funds – Ilex Credit fund (ICF)
and Ilex European Leveraged Loan fund and were one of the pioneers of L/S credit investing having started Ilex in 2000.


Simon Thorp
Chief Investment Officer
ILEX Asset Management (UK) LLP
Tel +44 20 7734 0064
Fax +44 20 7734 6611
Clarebell House, 6 Cork Street, London W1S 3NX, United Kingdom.


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