picture alliance/dpa/Arne Dedert | iStock/Getty Images Plus/gorodenkoff | Graphics: Dominik Schmitt
In recent weeks, a London investment firm has placed a billion-dollar bet on the fall of German stocks.
Documents submitted to British authorities and reports in the Federal Gazette show that Qube Research & Technologies (QRT) is betting on a fall in the share price of Volkswagen, Rheinmetall, Deutsche Bank and Siemens, among others.
QRT was only founded in 2018, but already manages assets worth over 35 billion euros.
Germany has not had a good year. Economic output fell by 0.3 percent, an OECD low. The number of unemployed people rose by almost 200,000 to 2,609,000 million people. Inflation averaged 5.9 percent for the year.
A circumstance that brings financial vultures onto the scene. One of them: the London investment firm Qube Research & Technologies (QRT). In recent weeks, QRT has increased its net short positions in shares of German companies. Documents submitted by QRT to the British tax authorities show that the fund placed so-called shorts across the entire DAX.
Among the companies affected are Volkswagen, Siemens Energy, Deutsche Bank, Rheinmetall and Vonovia. The corresponding short positions have been concluded on blocks of shares worth hundreds of millions of euros. In Rheinmetall alone, Qube Research & Technologies has placed a short position on 0.94 percent of the company’s shares; 0.56 percent of the shares are shorted at Volkswagen and 0.5 percent at Deutsche Bank.
Like the news agency Bloomberg calculated, QRT has placed a bet of over one billion euros against the German economy across all short positions.
Read too
Investments in homeopathy: This is how much money the BMW heir and multi-billionaire Stefan Quandt earns with Globuli & Co.
Offices in London, Paris, Hong Kong – and the Cayman Islands
But why does QRT make such a bet? And who is actually behind the fund that is betting so much money against German companies?
Qube Research & Technologies was only founded in 2018. The company emerged from an investment division of Credit Suisse; the two French founders, Pierre-Yves Morlat and Laurent Laizet, worked in leading positions at the investment bank.
QRT grew quickly and, according to its own information, the company now employs over 600 people and manages assets worth more than twelve billion euros. The investment company’s headquarters is in London, but QRT also has offices in Hong Kong, Dubai, Zurich, Paris and the tax haven of the Cayman Islands – but none in Germany, against whose largest corporations the company has now placed its short bet.
Read too
Danger for key German industry: Why an ex-top developer from BMW is warning of the decline of one of the most important e-car technologies
DAX record still in December: Why is QRT betting against the German economy?
And it’s not a bad bet that QRT is making. Also for 2024 Economists in Germany expect a recession. The Institute for Economics (IW) in Cologne, for example, is assuming a slump in economic output of 0.5 percent. That doesn’t have to mean that the DAX will also post bad figures in 2024. It wasn’t until mid-December that it exceeded the record mark of 17,000 points.
But last but not least, the drastic restructuring program at Volkswagen (Business Insider reported) shows that the still good share values of the top German DAX companies were primarily achieved through savings and cuts in personnel and investments. A course that cannot be maintained forever – from a certain point onwards, a company’s growth must be sustainable in order to keep its values stable on the stock market.
It is possible that QRT is betting that this will not work in Germany. Or that the ECB’s interest rate policy will continue to weigh on stock prices in Germany in 2024. It is unclear why exactly the company placed its billion-dollar bet against the German economy. She did not respond to a query from Bloomberg.
Read too
Once a family with a dark past, today powerful US funds: This is how Rheinmetall’s shareholder structure has changed