Justin Braitling comes across as a glass half full kind of guy. However, the portfolio manager in charge of Watermark Funds Management, the hedge fund that manages a billion dollars in institutional mandates and in one unlisted and two listed funds, seems more interested in what could go wrong than in what could go right. And there's good reason.

Much of his outlook flows from the view that debt funding, particularly in the United States where corporate credit is used as a significant funding source, is about to get more expensive. This will lead to many more companies, particularly in the energy and resources segment, to default on their (significant) debts.