Could WES be interested in FMG?, page-30

Top bond investors are predicting more carnage for high-yield fundsamid a market rout that forced a Third Avenue Management mutual fund last week to freeze redemptions.
Scott Minerd, global chief investment officer at Guggenheim Partners, predicts 10 per cent to 15 per cent of junk bond funds may face high withdrawals as more investors worry about getting their money back.
He joins money managers Jeffrey Gundlach, Carl Icahn, Bill Gross and Wilbur Ross in warning of more high-yield trouble ahead.
"The risk is that this is going to cascade into something bigger," Minerd, whose firm oversees $240 billion, said in an interview. "If we're going to see contagion, the most vulnerable funds are going to be the ones that are down significantly."
Debt of struggling companies has slumped, with one market gauge falling to a six-year low, as declining energy and commodity prices hit producers just as the Federal Reserve prepares to raise borrowing costs for the first time in almost a decade.
Third Avenue said late last week it was liquidating a $US788.5 million corporate debt mutual fund and delaying distribution of investor cash to avoid bigger losses. Stone Lion Capital Partners said it's suspending redemptions at a $US400 million credit hedge fund after clients asked to pull too much money.
The SPDR Barclays High Yield Bond ETF, a proxy for the market, fell 2 per cent on Friday, its biggest one-day drop in four years, and closed at its lowest level since July 2009. Many funds had bigger losses, and shares of most high-yield exchange- traded funds were trading below the value of their assets.
Icahn, a billionaire who has been betting against high- yield, has criticised high-yield ETFs for giving less sophisticated investors easy access to a market whose risks they may not fully understand. He said in a post on Twitter Friday that the selloff in the debt is only getting started.
Unlike hedge funds or private equity funds, where investor money is locked up for longer periods, mutual funds are required to let clients pull out on a daily basis, and ETFs even provide intraday liquidity. That makes them less suitable to invest in hard-to-sell assets.

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If there is a total heading for the exits of high yield junk bonds, it could be a sign the market is factoring 'troubles' ahead?