Hedge Fund That Gained 523% on China Property Bonds Is Selling
- Bull Asset, Silver Leaf are cashing in after the bond rally
- Sector’s elevated debt levels a key concern for fund managers
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One of China’s best-performing hedge funds has exited a lucrative wager on property bonds, joining several peers in unwinding bets on the nation’s economic recovery.
Shanghai Bull Asset Management Co. is concerned about the sector’s debt burden and has sold all its CIFI Holdings Group Co. bonds after purchases of those beaten down assets helped spur a 523% increase in its distressed-debt strategy in 2022. Shanghai Silver Leaf Investment Co., which booked a 136% gain last year using interest-rate swaps, has dumped almost its entire portfolio of homebuilder bonds it scooped up late last year in a high-yield strategy when policy easing boosted prices.