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April 18, 2024
PI Global Investments
Hedge Funds

Hedge Fund Qube Built a $1 Billion Short Bet Against German Stocks Including Deutsche Bank, VW

(Bloomberg) — Qube Research & Technologies Ltd. has amassed a short bet of more than $1 billion against German companies amid a downturn in global demand that’s slowing Europe’s biggest economy. 

The hedge fund added to wagers against the likes of automaker Volkswagen AG over the last two weeks, including disclosing a $131.8 million short against Deutsche Bank AG, according to data compiled by Bloomberg from regulatory filings. It’s the biggest disclosed short seller of the country’s stocks, the data show.

Many German companies have been hurt by a combination of the energy crisis, a shrinking domestic economy, weaker exports outside the European Union and rising interest rates. The government, which has been losing support, plans structural reforms to improve growth, while falling power costs and a drop in inflation should provide some relief for consumers this year.

The wagers come even as the benchmark DAX stock index remains near its record high as equities rally on expectations that central banks will cut interest rates aggressively this year.

Representatives for Qube, Volkswagen, Siemens Energy AG, Rheinmetall AG and Deutsche Bank declined to comment.

The hedge fund, spun out from Credit Suisse in 2018, managed about $11 billion last year and uses quantitative trading signals to take positions in equities, fixed income and commodities among other markets.

It’s not clear whether the bet, which amounts to almost 50% of its disclosed shorts, is an outright wager on a fall in shares or part of a broader hedging strategy by the firm’s money managers.

Short sellers borrow shares and sell them in the belief they’ll be able to buy them back at a lower value and book the difference as a profit. 

–With assistance from Monica Raymunt, Steven Arons and Wilfried Eckl-Dorna.

©2024 Bloomberg L.P.

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