New Short-Biased Hedge Fund Minerva Taps Michael Burry to Target Private Credit Risks

Minerva Investment Management, a short-biased hedge fund founded by Laks Ganapathi, will launch later this month with famed short seller Michael Burry as senior adviser, targeting what it calls hidden froth in private credit loan books across healthcare, retail, restaurants and smaller banks. Ganapathi said credit is the leading market indicator, warning the situation could be worse than 2008. The fund points to private credit's opacity, citing bankruptcies at auto parts supplier First Brands, car dealer Tricolor and UK mortgage provider Market Financial Solutions. US private credit default rates hit an all-time high of 6.3% in August on an annualized basis, according to Fitch Ratings. Minerva enters a shrinking space: dedicated short-biased funds fell to six in the second quarter of 2026 from 54 in 2008, per HFR, amid regulatory scrutiny and the 2021 GameStop squeeze. Burry, known for "The Big Short," wound down Scion Asset Management last year.