Short-seller Bronte Capital has started betting against corporate debt, aiming to profit if the companies behind the loans fail. The hedge fund is actively looking to short the debt, taking advantage of the high insolvency rates and questionable companies obtaining billions of dollars of debt. Bronte sees an attractive risk-return opportunity in this strategy.
A volatile cocktail of decade-high insolvency rates and booming investor appetite has driven short-seller Bronte Capital to begin betting against corporate debt , hoping to cash in if the companies behind the loans go bust. Because of this, Mr Hempton said, the high-profile hedge fund was now actively looking to short the debt – that is, betting that the market value of the loans would fall if the companies became further distressed.
Bronte, which typically invests in global equities, said it had been drawn to the strategy by the attractive risk-return opportunity
Short-Seller Bronte Capital Corporate Debt Insolvency Rates Hedge Fund Risk-Return Opportunity
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