London — London-based hedge fund Cheyne Capital is planning a new vehicle to buy debt that has been excessively punished by the coronavirus sell-off, the latest in a number of investment firms targeting distressed credit.

The firm is seeking to raise €300m and will launch the fund as soon as June, according to people with knowledge of the matter. Cheyne will buy up bonds and loans that it deems are now cheap and sell them once they have recovered, said the people, who asked not to be identified...

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