Black-Swan Funds Thrive as Wall Street Doomsayers Have Their Day

(Bloomberg) — Money manager Sushil Wadhwani could barely get a meeting started last year before clients started grilling him for advice on how to survive the next market crash.

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So in February, the chief investment officer of PGIM Wadhwani duly launched a defensive fund that takes short positions in equities and buys haven currencies, among other things.

“We would schedule a meeting to talk about our flagship strategy and in about five minutes they’d pivot,” said Wadhwani, who sat on the Monetary Policy Committee at the Bank of England before starting a money management firm later acquired by PGIM Quantitative Solutions. “Clients said they’d prefer a highly reliable protective portfolio against equities going down.”

Demand for market hedges is growing on Wall Street as Russia’s invasion of Ukraine sparks a global security and energy crisis, just as inflation runs amok and the Federal Reserve gears up to hike rates aggressively.

So-called Black Swan…