Short-seller Carson Block's Muddy Waters Capital to manage outside money

Mr Carson Block, research director and founder of Muddy Waters LLC.
Mr Carson Block, research director and founder of Muddy Waters LLC.PHOTO: BLOOMBERG

WASHINGTON (BLOOMBERG) - Mr Carson Block, the financial researcher who reports on business and accounting fraud, plans to put his expertise to work for outside investors.

Muddy Waters Capital, an affiliate of Block's Muddy Waters Research, received regulatory clearance last week to operate as a money management firm, according to an investment adviser registration filed with the US Securities and Exchange Commission.

Mr Block, 39, is starting with US$100 million (S$143 million) from one investor, according to a person familiar with his firm. Until now, Mr Block has managed his own money.

The firm registered with the agency through an exemption provided for money managers who oversee less than US$150 million of assets.

Mr Block is primarily a short-seller, betting against stocks he expects to tumble. He criticised the accounting practices of Singapore-listed Noble Group many times last year.

The new Muddy Waters fund may also make bets on stocks that Mr Block expects to rise, said the person, who asked not to be named because the information is private. Last year, Mr Block said he owned shares of Bollore Group, a French holding company. He said at the time that the stock could double in value to about 8.50 euros. The shares closed on Monday (Jan 25) at 3.76.

Mr Block declined to comment on his fund.