Hugh Hendry, the voluble hedge fund manager well known for his bearish but highly successful calls on the global economy over the past two years, has taken a big position that is designed to profit from a crash in China.

Mr Hendry’s London-based Eclectica Asset Management has constructed a “short credit” portfolio that stands to make gains of 250 per cent for his flagship fund in the event of a slump in China’s growth.

Eclectica is also poised to launch a standalone fund to benefit from the strategy next month, the Financial Times has learned.

The new fund will stand to deliver even larger gains than those for the main fund if successful.

“The investment team and I have carefully constructed a short credit portfolio made up of over 20 single-name industrial, cyclical businesses that have the dubious distinction of suffering from gigantic financial leverage and Asian/commodity overdependence,” Mr Hendry wrote to investors in his monthly letter this week.

“Without a doubt, some of these businesses will not survive. Others will have to be radically overhauled and restructured and we will make money,” said Mr Hendry.

Calls to Eclectica for comment yesterday were not returned.

Mr Hendry – who spun Eclectica out of Odey Asset Management, one of London’s best-known hedge funds in 2005 – delivered huge returns to clients in 2008 for correctly calling the economic downturn.

The Eclectica fund rose 50 per cent in October 2008 alone following the collapse of Lehman Brothers.

Mr Hendry’s latest call pits him against Anthony Bolton – one of the best known fund managers in the world. Mr Bolton, president of investments at Fidelity International, raised £460m ($659m) for his China Special Situations trust in April amid a flurry of publicity. Mr Bolton said at the time that he believed talk of a China bubble was “overstated”.

James Chanos, the activist and renowned short-seller is also predicting a dramatic collapse in the Chinese property market.