Short seller makes millions by exposing corporate wrongdoing, at a high price

Relaxing on a couch in the living room of his newly built home, former social worker turned short-seller Fraser Perring doesn’t seem like the man to terrify the hearts of executives from New York to Tokyo.

But from a sleepy town near Lincoln, he runs Viceroy Research, which makes its money by betting against corporations and then releasing investigative reports on their activities.

I’m taken to his lavish home in a sleek black Bentley SUV, so it looks like his career move has largely paid off.

In addition to his Bentley, he also owns a black SUV, an Audi and an orange Lamborghini Urus. He calls them his “toys.”

Short sellers like Perring are often portrayed as vultures, feasting on crisis and adversity. Their own view is that they are essential to the proper functioning of markets, often like canaries in the coal mine and warning the rest of the world of impending disasters.

Usually they like secrecy, so our conversation is a rare insight into their way of thinking and methods.

It’s been six months since Viceroy’s explosive report to Home Reit – a real estate investment trust that helps the homeless and vulnerable. Following the release of the report, Home Reit’s share price fell before trading was suspended.

Several of its charitable tenants are now in liquidation and an investigation into the accounts is being carried out by accountant BDO.

Forensic accountants Alvarez & Marsal found a lack of transparency on the part of the company’s former investment advisor Alvarium, as well as deficiencies in due diligence and oversight of the tenants’ finances.

It sounds like music to the ears of Perring who, along with his colleagues at Viceroy, benefited greatly from the collapse of Home Reit. He is said to have earned more than 4 million pounds. He won’t reveal the exact amount, just saying it was “a good trade.”

Perring has no sympathy for those in charge of the company. “The board denied our information and said it was completely false [when published]. Turns out we were right,” he exclaims.

Over lunch, Perring outlined the philosophy behind Viceroy’s process in deciding which companies to target. “There’s always something missing,” he says, pointing out that at Home Reit there had been a gap between what residents said about the quality of the properties and the “ESG [environmental, social and governance] bulls**t that was told to the market’.

He also rejects claims that his work is based on underhanded tactics. “We rely on public disclosures and we give our opinion about a company,” he emphasizes.

Perring is currently involved in feuds with several other companies worldwide. One of these is Medical Properties Trust, a US-listed healthcare real estate investment trust that was targeted by Viceroy in January and whose share price has since fallen more than 27 percent. In March, the company decided to sue Perring’s outfit, arguing that the allegations were baseless. But he remains unfazed by the legal battle, saying the company’s business model is “not right.”

Viceroy is also battling with SBB, a Swedish landlord whose founder and boss Ilija Batljan stepped down earlier this month, as his empire teeters on the brink as it struggles with a £6.4bn mountain of debt.

Perring took aim at SBB in February and has kept the pressure up ever since. He describes Batljan as “a complete fantasist” because he used to dismiss vulnerabilities in the company. “If he told me what time it is, I would need three other people’s watches to verify,” he said. “He’s not fit to drive a civilian van.”

His latest target is Abalance, a Japanese solar panel manufacturer that accuses Viceroy of using a Vietnamese subsidiary to evade US sanctions against Chinese goods made with Uyghur forced labour. Abalance strongly denies the claims.

Others that have drawn his ire include Elon Musk’s Tesla, which Perring shorted early last year because he claimed he was overvalued. Another is German-South African retailer Steinhoff, which faced an accounting scandal in 2015.

Perring believes fund managers who put client money into fraudulent companies should be held accountable. “If they are found to be involved in fraud, they should be punished,” he says. Their rates need to come down. There is currently no fine for bad work.’

Perring does not shy away from critics. Veteran Labor MP Liam Byrne, former chief secretary of the Treasury, claimed in parliament in March that Perring was “a not infrequent visitor to Moscow” and called for a government inquiry into whether some of the shortsellers had links to the Kremlin.

Perring denies the allegations and called on Byrne to repeat his statements outside the House of Commons, and thus without legal protection. “He’s a coward and he won’t even give any information, so he hired a lawyer,” Perring says.

The 49-year-old started short selling in 2011 while working as a child protection officer. His career as a social worker ended in 2013 after allegations that he failed to contact a foster child’s extended family to arrange for alternative care. Then he was turned down.

A 2014 report from a regulator accused Perring of falsifying documents and then lying to his supervisors. Perring said he followed protocol but was chastised for questioning the placement of the child.

He later sued his former employer Lincolnshire County Council for assault, defamation and breach of labor rights. The two sides eventually settled and Perring was awarded £24,000.

He pursued his investment passion full-time and had made more money in three months than he had in a decade in social work.

His first research firm, Zatarra, was founded with fellow shortseller Matthew Earl to publish reports anonymously.

In 2016 he met Australian researchers Gabriel Bernarde and Aidan Lau and together they formed Viceroy Research – a collaboration that continues to this day.

Not all of his shorts have played out as well as Home Reit, but the one he regrets the most is the one that first put him on the map.

“Wirecard,” he says, referring to the German payments giant that collapsed in 2020 after admitting it was missing £1.6bn in cash, sparking a global scandal that saw CEO Markus Braun, on trial, arrested.

“It brought out the best and the worst in people, including myself,” he admits. “I became obsessed.” Perring claims that the aggression from Wirecard and his agents was something he had never experienced.

He says the stress caused transient ischemic attacks, known as “mini-strokes.” Some employees thought he had become an alcoholic because of the effects on his speech.

“Would I do it now?” he wonders. ‘Yes, because I know what to expect. But as a way to start a short selling career I would say absolutely no. I was completely crazy. I went swimming with sharks and thought I was in a goldfish bowl.”

Despite the baptism of fire, Perring doesn’t seem to want to change direction.

‘I love it now. Besides, I don’t think there is another job for me. I’m pretty sure I’m unemployed anywhere else.’

Sitting relaxed in his cavernous living room overlooking his rolling lawn, Perring still feels the need to look over his shoulder.

In 2016, shortly after dropping his daughter off at school, he was locked in his car by two men who threatened to harm his family unless he admitted to writing reports on Wirecard’s affairs. Out of fear, he lied and denied being behind the reports.

As with many jobs, Perring says it’s the people that make it difficult, not the work itself or the intricacies of researching and compiling Viceroy’s reports.

“Without the people, short selling would be the easiest calling in the world. Do I think short selling is stressful? No. Do I think the people you are exposing are? Yes.’