Job prospects at credit-focused funds got a little bleaker after SAC Capital announced plans to shuffle its Sigma Capital Management LLC unit.

Bloomberg reports SAC Capital will close the fixed-income business at Sigma Capital. The $16 billion, Greenwich, Conn., fund company will eliminate eight jobs and reallocate some of its fixed income assets to equities. The cuts were made on June 30.

Primarily an equity shop, SAC recently has scaled back its fixed-income trading focus, letting go many of its credit specialists. It will now part ways with Mark Davies, the former Bear Stearns executive who joined early in 2007 to boost its fixed-income investments.

At the same time, many other fund companies are bulking up their credit strategies, especially for distressed debt. The distressed debt arena also is seeing numerous new fund launches.

One recent example: last month Tudor Investment Corp. launched a credit investment strategy spearheaded by five former Bear Stearns distressed-debt executives and analysts, with plans to eventually spin off that new business into an independent advisory firm. Articulating what's drawing so many of his peers into the credit space at this time, founder Paul Tudor Jones II cited "significant investment opportunities" arising from "dislocation and lack of liquidity in credit-related strategies."