Money Managers Seek to Profit from Europe’s Woes

They’re buying downgraded bonds and betting on a slowdown

Illustration by Oliver Munday

When Moody’s Investors Service (MCO) downgraded Ireland’s sovereign debt to junk status on July 12, a week after giving Portugal’s debt similar treatment, it came as no surprise to Sandor Steverink. Europe’s best-performing government bond fund manager over the last decade, Steverink predicted both downgrades. Soon it will be time to buy, he says. “What we’ve learned from emerging markets is that you get only a full recovery after a proper restructuring,” says Steverink, who is co-head of a team managing €26 billion ($36.4 billion) at Dutch insurer Delta Lloyd. “We think that’s necessary for Greece and, in the end, probably for Ireland and Portugal, too.”

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