Prominent UK hedge fund manager, Hugh Hendry (pictured), the CIO and CEO of Eclectica Asset Management, has started taking short positions on China on expectations that
Prominent UK hedge fund manager, Hugh Hendry (pictured), the CIO and CEO of Eclectica Asset Management, has started taking short positions on China on expectations that the Asian powerhouse will slow down, reports the Financial Times this week. Very few fund managers are taking this stance, in large part because the very process of “going short” on China is extremely difficult; shorting Chinese stocks is tricky even for Chinese nationals. Fund managers looking to take a bearish stance are therefore required to explore indirect, proxy alternatives. Hendry himself is doing this by buying credit default swaps (simply put, a form of insurance) on Japanese corporate credits, believing these to be the instruments most likely to be affected by any form of contraction.