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Thursday, March 28, 2024

Bridgewater’s European Short Grows To A Massive $22 Billion: Here Are The Targeted Companies

Courtesy of ZeroHedge. View original post here.

In the red corner we have Mario Draghi, who runs the world’s biggest and most activist central bank… and in the blue corner we have Ray Dalio, who runs the world’s biggest hedge fund and has been systematically betting against the companies backstopped by his opponent.

They are set for a historic clash.

* * *

Less than a week ago, we were surprised to learn  that what was until the start of the month “only” a $3 billion short bet against a broad selection of Europe’s most popular public companies, had grown into a massive $13 billion basket of shorts. Well, fast forward to today when according to the latest breakdown of his filings by Reuters, Ray Dalio has been especially busy, and since last Friday he added another $9 billion shorts, bringing Bridgewater’s total short against some of the continent’s biggest companies to a record $22 billion.

While there was no offsetting data to show whether the $160 billion in AUM Bridgewater holds more European stocks than it “shorts” overall, an investor in the hedge fund firm’s Pure Alpha Major Markets strategy said that the fund had reduced its long exposure significantly this year.

And although the filings do not say when Bridgewater first took out its European short positions – our first report of Dalio’s European short was back in October when the fund had a tiny $700 million short – many of its latest disclosures are recent, with some in Germany, Italy and France in the past two weeks.

As shown in the breakdown below, Bridgewater has bet against firms ranging from Anglo-Dutch consumer giant Unilever to French oil giant Total, and virtually every single prominent public bank.

Since Bridgewater is not known for picking individual stocks, the manager’s position was the result of a view on the wider economy according to James Helliwell, chief investment strategist of the Lex van Dam Trading Academy.

“Whilst the extent to which it may be an outright short bet is uncertain, I suspect that it was seen as a relatively cheap hedge against existing global equity exposure.”

Broken down geographically, Bridgewater’s short positions are the highest in Germany with $7.3 billion, followed by France with $4.5 billion while in Spain its shorts in four groups amount to almost €1.4 billion ($1.7 billion) and in Italy include Unicredit and Enel. The portfolio has been fluid, adjusting its trades and recently cutting back on shorts in the Netherlands, Spain and Ireland, while increasing them in Germany and Italy.

Overall, traders told Reuters that the bets could be because Bridgewater is either expecting the stock market to fall or they are a play on the broader macroeconomic environment – hurting companies with large business exposures in the United States.

Below is a list of the European companies in which Bridgewater has taken short bets on in the past few weeks. The table discloses the latest available data on the 59 European companies where the Bridgewater stake has triggered reporting obligations by the respective financial market regulators.

And the top 30 shorts, charted.

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