While Wall Street focuses on AI bubble risks, Minerva Investment Management—a new short-biased hedge fund launched by Laks Ganapathi with “The Big Short” investor Michael Burry as senior adviser—is setting its sights on brewing froth in the private credit market.
Key Fund Metrics & Market Context:
- Target Sectors: Scanning healthcare, retail, restaurants, and regional banks whose debt is heavily tied to opaque private credit books.
- Record High Default Rate: U.S. private credit default rates surged to an all-time high of 6.3% in August 2026 on an annualized basis (Fitch Ratings).
- Private Credit Opacity: Follows high-profile bankruptcies including U.S. auto supplier First Brands, car dealer Tricolor, and UK lender Market Financial Solutions.
- Tough Short Landscape: Short-biased funds have plunged from 54 in 2008 to just 6 in Q2 2026 (HFR data) amid regulatory scrutiny and meme-stock short-squeeze risks.
- Leadership Background: Burry wound down Scion Asset Management in 2025; Ganapathi previously founded short-research firm Unicus Research (notable bearish calls on Carvana and Faraday Future).
A high-conviction contrarian play warning that private credit defaults could present a far deeper market disruption than AI valuations! 📊📉🇺🇸