Hedge Funds That Won Big in China Bond Meltdown Now See Risk
- Panic selling brought rare opportunities for distressed debts
- Top performers become more cautious this year as risks rise
Unfinished apartment buildings at the construction site of a China Evergrande Group development in Beijing, China.
Photographer: Andrea Verdelli/BloombergThis article is for subscribers only.
As default risks surrounding troubled issuers like China Evergrande Group rocked the nation’s bond markets last year and left global investors nursing losses, a handful of little-known hedge funds swooped in.
Shenzhen Qianhai Guoen Capital Management Co., Fuhui Juli Wealth Management Corp. and Shenzhen Qianhai Jiuying Asset Management Co., which between them manage more than 20 billion yuan ($3.2 billion), pocketed gains of 319%, 104% and 96% respectively under their high-yield strategies, after scooping up distressed debts issued by property firms and local government financing vehicles.