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New short fund taps Burry as targets US private credit risks

Дата публикации: 29-09-2026 08:29:00

A new short-biased hedge fund has hired Michael Burry as it prepares to target potential weaknesses in private credit, focusing on companies whose financial pressures could be obscured by opaque lending markets, according to a report by Reuters.Minerva Investment Management, founded by short seller Laks Ganapathi, is due to launch later this month and has brought Burry on as a senior adviser. The fund is examining potential short opportunities across healthcare, retail, restaurants and smaller banks, according to Ganapathi.Ganapathi said financing arrangements linked to private credit could leave some companies facing greater financial stress than is apparent from their reported results. She declined to identify specific targets or disclose the size of the fund.US private credit's annualised default rate reached 6.3% in August, its highest level on record, according to Fitch Ratings.Ganapathi said Minerva believes private credit could provide an important signal about broader market conditions, while arguing that current risks differ from those that preceded the global financial crisis.The strategy is being launched in a difficult environment for dedicated short sellers. HFR data showed there were only six dedicated short-biased hedge funds in the second quarter of 2026, down from 54 in 2008.The decline reflects several factors, including difficult market conditions for short strategies, greater regulatory scrutiny and changes in US hedge fund reporting requirements.Short sellers also face the risk that share prices can move sharply against fundamental analysis, as demonstrated by the GameStop trading frenzy in 2021, when retail buying drove large gains in heavily shorted stocks.

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