Hedge fund manager, Joe Feshbach, famous for shorting stocks during the 1980s, has established a new fund specializing in “crisis investing”...

Hedge fund manager, Joe Feshbach, famous for shorting stocks during the 1980s, has established a new fund specializing in “crisis investing”, - buying equities in troubled firms.

Known as Joe Feshbach Partners LP, the fund will identify stock which has suffered significant price falls, often as a result of perceived corporate governance failures but which underlying fundamental strength and which exhibit signs of undergoing a strong recovery – in short where the impact of the crisis has been overestimated by the market.

For Mr Feshbach, a crisis is seen as a trigger point to start researching an opportunity.

Mr Feshbach claims to have achieved gross returns of 80 per cent using this methodology to trade his own money. Whether this is scaleable and can be replicated with the extra concerns external investors bring is another matter.