Mark Spitznagel, the founder of Universa Investments, says the financial system is most vulnerable to “the greatest credit bubble of human history”. His fund intends to provide their client’s hedges to black swan events. From a letter obtained by Bloomberg, its options traders have yielded a return of 3,612% in March 2020.

He’s long been critical of central banks keeping interest rates near-zero or even negative, which he says has propped up asset values. He thinks that the climate of excessive borrowing has gone on for too long. He also says traditional safe-haven assets are failing, which further adds to the bubble. His warning follows other cautious remarks this week from JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon and Goldman Sachs President John Waldron.

Spitznagel has also been critical of Hedge Funds for not providing the correct solutions to clients to the right problems. This comes after Chase Coleman’s Tiger Global Management had a 52% plunge in their fund – a fund that has produced stellar returns previously. The time of popular strategies such as risk-parity and hedging volatility, do not improve returns significantly, says Spitznagel. Adding that tactical risk mitigation will not work for hedge funds this time around.

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