Record EM Inflows Prompt Hedge Funds Shiprock, Broad Reach to Turn Away Investors

A record flood of capital into emerging-market debt is forcing two specialist hedge funds to stop accepting new money. Shiprock Capital Management Ltd., with assets topping $1 billion, and Broad Reach Investment Management, nearing its $3 billion ceiling, are turning away investors as the challenge of deploying cash in illiquid corners of the market intensifies. The firms focus on distressed bonds from countries such as Venezuela and Ukraine, where large positions can be hard to enter or exit without moving prices. “Infinite capital is not your friend in the space,” said Shiprock CEO Frederick Schroder. EM debt funds have attracted inflows for seven straight weeks, drawing $3.1 billion in the week ended May 27, 2026, according to Bank of America/EPFR data. Hedge funds in the asset class have returned 33% on average since early 2024, Bloomberg indexes show, driven by performance gains and fresh allocations. While Shiprock and Broad Reach pull up the drawbridge, they are raising new pools for alternative debt, including private credit-style strategies, to capture opportunities outside public bond markets.