UK hedge fund manager and well-known contrarian Hugh Hendry has presided over 52% YTD gains in his ‘China short’ fund, which bet against credit companies poised to falter during a Chinese slowdown.
According to the Financial Times, the trade has proved one of the most successful in the hedge fund industry in 2011.
Hendry’s credit fund shorts highly cyclical Japanese corporate credits with high exposure to Chinese demand.
His flagship Eclectica Fund, also partly invested in credit default swaps contracts against Japanese credits, has returned 12.2% YTD, investors told the FT.
Hendry has been warning of a Chinese slowdown since 2009, going so far as to upload a video to YouTube of himself “looking for tenants” in deserted Chinese real estate developments.