Fahmi Quadir, founder and chief investment officer of Safkhet Capital Management LLC and one of the most prominent short sellers in global equities, is preparing a new fund that will invest in South Korea, according to a report by Bloomberg.

Quadir, who earned a reputation through successful short positions against companies including Valeant Pharmaceuticals and Wirecard, said the strategy reflects changing market dynamics and a reassessment of opportunity sets rather than an exit from short selling. “I wouldn’t read too much into this as ‘the last short seller throws in the towel’,” she said in an interview recorded at a live Bloomberg Odd Lots podcast event in London. “It’s really about thinking about my identity as a short seller, and what do I want my legacy in the markets to be.”

The move comes amid a broader identity crisis in the short-selling industry, as persistent equity market gains and structurally rising indices have reduced the number of dedicated short-bias hedge funds. Several well-known contrarian investors, including Jim Chanos, have already exited the sector in recent years.

South Korea, however, offers a different setup. The country’s KOSPI index is the world’s best-performing major equity benchmark this year, rising more than 80% amid enthusiasm around artificial intelligence and semiconductor demand. Despite the rally, Korean equities continue to trade at a steep discount to US peers, with valuation multiples less than half those of the S&P 500.

That disconnect, Quadir argues, creates opportunity. Structural issues such as complex cross-shareholdings, family-controlled conglomerates, and elevated inheritance taxes have long weighed on corporate governance and investor returns. While regulators have attempted reforms aimed at improving shareholder returns and attracting global capital, the market still carries a governance discount.

The country’s heavy exposure to the memory-chip cycle has also contributed to valuation volatility, with major names such as Samsung Electronics Co. and SK Hynix Inc. trading at lower multiples due to the sector’s historical boom-and-bust dynamics.

Quadir said her focus will be on smaller companies with less international exposure and more entrenched domestic governance structures, where she sees scope for “long shareholder activism” to unlock value.

“I’m looking at the businesses that don’t have as much experience with foreign markets,” she said, adding that Korea’s ongoing push for developed-market status from MSCI Inc. could act as an additional catalyst for structural change.

She framed the strategy as an extension of her previous work identifying mispricing and governance failures, but applied through a long-only lens.