While the fiscal troubles of the Eurozone are widespread, asset allocators on the buy side foresee no troubles for alternatives.

Europe’s ongoing debt crisis may be responsible for wild market swings and general volatility, but hedge funds will be relatively untouched, according to one buy-side player.

Although U.S. hedge funds have shown less-than-stellar performance in the third quarter, Jose Castellano, managing director of global asset manager Pioneer Investments, believes investors should hang on to alternative investments, despite Europe’s macro troubles for long-term exposure.

“It’s been challenging in every asset class, but the exposure to alternatives is coming back for institutional investors,” Castellano said. “It’s favorable to be diversified, and when the market normalizes, there will be many opportunities for institutional and retail alternative investors.”

Indeed, the U.S. markets have seen this before. At the height of the 2008 credit crisis, hedge funds plummeted sharply in performance and outflows, but have become somewhat “normalized” today.

More specifically, Castellano told Markets Media of European hedge funds “are taking advantage of opportunities in regards to prices stemming from the distressed debt,” in response to the macroeconomic unfolding in Europe. Furthermore, he sees opportunity to truly “generate alpha” and feels the industry will “develop talent.”

Pioneer, with a U.S. base in Boston, $230 billion assets under management.

The Hedge Fund Association (HFA), a lobby group for hedge funds, recently announced Castellano will head its newly launched southern European Union (EU) chapter. In his new role, Castellano will serve as the public face of the chapter representing funds primarily domiciled in Switzerland, Italy, Spain and Portugal.

There is little correlation between the timing of the chapter’s launch and the ongoing turmoil within the region, said Castellano.

“There’s not a lot of correlation, but the launch is timely,” he told Markets Media. “As a whole, the crisis is not specific to hedge funds.”

Still, a wide array of banking failures amongst the region will certainly affect the sell-side at large, which will funnel down to all asset managers, who rely on banks for funding.