2026 Market View: Developed Market Special Situations

Dec 04, 2025

Adam Phillips, Head of BlueBay Developed Market Special Situations, summarises the market in 2025 for the asset class, and gives his thoughts for 2026.

  • Persistent challenges including excess leverage, high interest rates, and energy costs have expanded European special situations opportunities in 2025, as companies face cash shortages and near-term debt maturities.
  • Stressed, distressed and event-driven activity has risen, particularly in the mid-market, where companies are generally unable to borrow money from banks or raise money in the capital markets.
  • For 2026, stagnant European economies and fiscal tightening are expected to accelerate restructuring demand, with opportunities in sectors such as chemicals, paper/packaging, and auto parts sectors in focus.
  • Geographic opportunities centre on the UK, France, and Germany, but the German mid-market remains a key area, with a prolonged restructuring cycle anticipated over the next 3-5 years.


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