Vulture funds circle China’s debt-laden corporate sector
As a slowing economy and a deleveraging campaign by the nation’s leaders send defaults through the roof, a growing band of hedge funds is trying to exploit opportunities in China’s corporate bond market.
Beijing | Wang Yizhi sensed an opening last July when local investors raced to dump the debt of Future Land Development, a Shanghai-based developer, after the arrest of its founder on sexual abuse charges.
Shortly after the scandal broke, Mr Wang, general manager of Raman Capital, bought four-year bonds for 88 cents on the dollar. Within weeks, he had sold them for 95 cents, after the developer put dozens of projects on sale to improve its cash flows.
