A Top-Performing Hedge Fund Is Shorting Canada Banks on Housing
- Companies are generating little cash flow, Crescat adds
- ‘Canadian banks will be left holding the bag,’ analyst says
Bank towers are reflected in a window in Toronto’s financial district
Photographer: Brent Lewin/Toronto
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A small U.S. hedge fund that was a top performer last year is shorting Canadian banks.
Crescat Capital sees the Canadian economy heading for recession as the housing market buckles. That might be bad enough for the banks but they face an added strain: outside the financial sector, more than 80 percent of Canadian companies aren’t generating enough cash to support their businesses, the highest percentage in the world, according to Crescat.