Spending cuts benefit special sits managers

Special situations managers believe the Comprehensive Spending Review provides an entry point back into the UK equity market as they prepare to take advantage of businesses hit by government cuts.

Last week, a report by insolvency specialist Begbies Traynor warned more than 50,000 companies are at risk from the cuts, with the construction, IT, recruitment, advertising and business services sectors experiencing financial distress in the third quarter of this year. Oversold opportunities Having spent the past year stripping their funds of firms reliant on government investment, managers are now eyeing up opportunities in companies they believe look oversold. Richard Plackett, manager of the £976m BlackRock Special Situations fund, ditched most of his holdings exposed to the gov...