By Emily Glazer
Hedge funds and private-equity investors are bidding up prices of some troubled assets in Europe, sparking a surge in sales by banks seeking to rid themselves of soured corporate loans.
For years after the financial crisis, European banks resisted selling their corporate loans for fear of having to record heavy losses. But recently, some European lenders have reversed their stance as demand for these assets has jumped. One reason for the shift: Defaults and bankruptcy filings have declined in the U.S., leaving investors with fewer opportunities to buy distressed debt and sell it for a profit in a restructuring.
“The prices have risen to the point where some banks are looking to sell because they’re seeing transaction prices that imply” a much smaller loss for certain assets, said Ari Lefkovits, a managing director at Lazard Ltd. LAZ +2.97% , who moved to London in August 2012 in part because of an anticipated uptick in European restructuring activity….