Hedge Funds Short ESG Market Darling Credito Real

 Hedge Funds Short ESG Market Darling Credito Real

Mexico’s largest payroll lender has had a tough year. Wall Street short sellers are betting it’s going to get worse.

Credito Real SA

CREAL 6.32%

B de CV raised money from bond funds and the U.S. government in recent years, using its status as a lender to Mexico’s poor to tap into the booming trend of socially conscious investing. Hedge funds including Millennium Management LLC and Bybrook Capital LLP have questioned the company’s accounting and wagered that prices of its roughly $2 billion of bonds will tumble, according to people familiar with the matter. Millennium and Bybrook declined to comment

The company has made great progress in reassuring investors, a spokeswoman for Credito Real said. Management is employing a strategy with “a much clearer focus on payroll loans now and a renewed emphasis on transparency,” she said.

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