Universa Investments Founder Mark Spitznagel Warns of ‘The Biggest Credit Bubble’ By Investing.com

© Reuters Universa Investments Founder Mark Spitznagel warns of the ‘biggest credit bubble’

By Sam Boughedda

Mark Spitznagel, the founder of Universa Investments, a fund that aims to protect clients during black swan events, told Bloomberg in a phone interview Thursday that the financial system is most vulnerable to “the greatest credit bubble of human history”.

Bloomberg reported that Spitznagel said “if this credit bubble ever bursts, it will be the most catastrophic market failure anyone has ever read about – but let’s hope that doesn’t happen.”

Universa was founded in 2007 and is advised by Nassim Nicholas Taleb. He specializes in risk mitigation, aiming to protect against the biggest stock market crashes.

“We put ourselves in a tough spot,” Universa’s Miami-based chief investment officer told Bloomberg, though he insisted he was not a pessimist.

Speaking about the hedge fund industry as a whole, Spitznagel said, “What good are hedge funds in someone’s portfolio? I’ve never been able to answer that question.”

Added: “Hedge funds have created a solution for the wrong problem.”

Spitznagel explained that funds tactically trying to mitigate risk “are going to be shuffled and burned, that’s what the market does to people.”