UK retail is among the sectors likely to be most actively targeted this year by so-called vulture funds that invest in distressed companies.

The vultures, typically hedge funds and banks’ proprietary trading desks, expect to become increasingly active in 2009 as the number of corporate debt restructurings peaks towards the end of the year.

A poll of vulture funds by Debtwire – a news service owned by the Financial Times Group – put opportunities in the UK ahead of countries such as Germany, France and Russia. Retail was highlighted as one of the most attractive opportunities, along with industries such as property and construction and the automobile sector, The Financial Times reported.

Alistair Dick of NM Rothschild’s debt restructuring team told the newspaper: “The most severe problem in Europe is the UK, where banks have been hoarding cash since September 2007.

“We do not see much let up, given potential provisioning banks will require as the recession hits their corporate loan books.”

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