Like most hedge fund firms, New York–based Marathon Asset Management performed poorly in 2008. But the firm, which specializes in making opportunistic investments in global credit markets, has since made hay by exploiting the numerous distressed-investing opportunities that arose in the ensuing global market turmoil. More than many other firms, Marathon has turned to Europe as a haven for distressed investing. The firm expanded its European strategy early last year on the tail of new European regulatory requirements, such as Basel III, in hopes of profiting from the resulting dramatic deleveraging by big banks. Various factors, including bailouts and policy reform, however, hindered this widespread deleveraging from happening. Now Marathon invests primarily in mortgage-backed securities and structured products of smaller Northern European regional banks that have received less support from the European Central Bank and sovereign countries. In January 2014 the distressed-debt manager launched the Marathon Europe Credit Opportunities Fund II after steady returns in European fixed-income markets the year prior…