May 16, 2018 / 4:03 PM / 2 months ago

MOVES-Glaucus co-founder sets up new short-selling fund

HONG KONG, May 17 (Reuters) - Soren Aandahl, one of the co-founders of short-seller Glaucus Research, is moving to set up a new fund named Blue Orca Capital after seven years at his former outfit.

Glaucus most recently attracted attention for its criticism of Australia-listed Blue Sky Alternative Investments Ltd , a fund manager, whose shares have fallen 76 percent since Glaucus claimed in late March that it had over-valued assets and exaggerated its performance.

Blue Sky has said the claims are incorrect and misleading.

Aandahl’s new fund will, like Glaucus, focus on short-selling ideas, where the aim is to profit from share price falls. The fund will focus on Asia, and China more specifically, but will also research potential targets in Europe and the United States.

“We will not hold back from exposing dishonest or complacent companies that flout their responsibilities,” Aandahl said in a press release, adding that he expected Blue Orca’s first short-selling idea would target a Hong Kong stock soon.

Aandahl is due to appear at the city’s now-annual Sohn Conference Hong Kong on May 30, where investors take turns to pitch a series of long and short ideas.

Much of Glaucus’s work since its inception in 2011 has focused on shorting Chinese companies such as Hong Kong-listed China Metal Recycling, which claimed to be China’s largest scrap metal recycler. Glaucus questioned its reported accounts in 2013. Within six months, the city’s regulator had begun to wind up the company.

Aandahl and his Glaucus co-founder, Matthew Wiechert, featured prominently in the 2018 documentary, The China Hustle, which tracks the efforts of a group of investors to expose fraud in China.

Reporting by Jennifer Hughes Editing by Christopher Cushing

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