Yu and De Weck both notably bet against German fintech group Wirecard, whose spectacular fall from grace in 2020 yielded short sellers over €1 billion ($999 million) of profit in just a week.

They also placed bets banking on the stock collapse of South African retail holding firm Steinhoff International, which came to fruition in 2017 after irregular accounting transactions were revealed.

Gotham City is well known for its 2014 report on Quindell, a country club turned insurance claims tech firm, saying it was built on “quicksand” and questioned its profits. Quindell won a libel claim against Gotham City after it failed to put up a defense.

The FT reported that General Industrial Partners will hold between 15 to 20 short positions and may take a concentrated bet on a stock in a separate vehicle if Yu and De Weck see a firm with significant enough issues that they could short against.

The fund will reportedly only charge investors with expenses and performance fees when it makes a profit. It will also seemingly keep most of its bets private.

Many short sellers have struggled recently to reap profits during a bull run market and last year, some – like Citron Research and Melvin Capital – got burnt during the meme stock Gamestop
GME,
-1.52%
short squeeze. Both Citron Research and Melvin Capital have now pivoted to long bets.

Short sellers have also been the subject of attention from the U.S Department of Justice, which earlier this year launched a probe over potential trading abuses around short selling.

The Securities and Exchange Commission has also laid out proposals for short selling funds to disclose more information about their trades.