(Reuters) When the Shanghai-traded bonds of conglomerate China Minsheng Investment Group plunged 40 percent over two days in January after news it had missed a repayment, Beijing-based hedge fund manager Jash Zhang smelled blood. As the private investors in the bond rushed to sell, Zhang snapped up CMIG’s dumped bonds at about 50 yuan ($7.48) apiece, or half their face value, betting that the 300-billion-yuan company would eventually repay the debt. The strategy?she said, is simply to pounce when faint-hearted investors are wavering.
China’s Fledgling Junk Bond Market Spawns New Breed of Vulture Funds
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