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Photo: Brian Snyder/ REUTERS
A week ago, a spectacular bet by the world's largest hedge fund caused a stir.
Bridgewater Associates, once founded by investor
legend Ray Dalio
(72) and worth around 150 billion dollars today, bet 5.7 billion dollars on the fall of 18 European companies.
This volume alone was considered quite extraordinary.
The Americans have now doubled their stakes and are betting at least $10.5 billion against European companies, Bloomberg reports.
And instead of being short against 18, the hedge fund has now placed bets against 29 major corporations.
Unlike in the US, the short positions against listed companies in Europe must be published.
Although there is no central register, the national supervisory authorities list the individual positions on a daily basis;
in Germany, for example, on the website of the Federal Gazette.
In order to get an overview of who Bridgewater is positioning itself against and with how much effort, manager magazin analyzed the national registers and calculated the value of each position.
In Germany, the companies that are all part of the EuroStoxx 50 index include SAP, BASF, Siemens and Bayer.
Bridgewater has also built up significant short positions against the Dutch chip group ASML, the French food giant Danone and the Italian utility Enel.
It is striking that the group bets against all banks in the index, including the represented energy and electricity companies.
Bridgewater seems to be picky about the tech companies in the index, as well as about chemical companies and consumer goods manufacturers: For example, Linde, LVMH or L'Oreal are not on the list of Americans.
Also striking: Bridgewater does not seem to believe in falling prices for any single car company.
Overall, Bridgewater chairman Ray Dalio is rather pessimistic about the economy.
"The times of a globalized world with minimal trade barriers and free flow of capital are over," he explained in a detailed interview with "SPIEGEL", which you can read here.
Inflation acts like a matchstick on the existing order.
For Ray Dalio and Bridgewater, it is not the first billion dollar bet against European corporations.
Most recently, in spring 2018 and 2020, the Americans had built up positions against some of the same companies.
At times, they were even significantly higher at the time, peaking at more than $20 billion.
The company did not comment on the current operations.
In principle, short positions can be built up for two reasons: Because investors are specifically targeting falling prices, i.e. expecting a slump in individual values or sectors.
Or they serve to secure other transactions.
While Bridgewater's current short positions are all in a similar range, each holding less than 0.7 percent of the company's shares;
however, the targeted selection points to a strategy.
Also a week ago,
Greg Jensen
, the company's co-chief investment officer, said the sell-off in stocks is small compared to the boom of the past decade and that bigger moves are still possible in Europe and the US.
Incidentally, the official statistics only list positions that are larger than 0.5 percent of the respective share capital of the company.
The crash bets of American hedge fund managers are possibly even higher.
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