The ranks of hedge fund managers expecting impending market chaos are growing.

Greg Coffey, the former star manager at Moore Capital Management who started trading at his own firm this year, is comparing the turmoil in May to the end of dotcom bubble in 2000. Horseman Capital Management’s Russell Clark, one of the most bearish hedge fund managers in Europe, invoked memories of the financial crisis of 2008 in a letter to clients.

The two managers, among the best-known in Europe, join a growing chorus of investors predicting an end to the decade-old rally in asset prices, as central banks move to normalize policies and the rise of populism threatens trade across the globe. Billionaire George Soros in May warned[1] of a looming financial crisis and an existential threat to the European Union. Crispin Odey has for years expected a market crash and lost money betting on it.

“The ghosts of 2000 are upon us,” Coffey wrote in a May investors letter for his Kirkoswald Capital Partners. “Make no mistake, this is the current investment environment we are in, and will be through 2018.”

Officials for Horseman and Kirkoswald declined to comment.

Painful Years

Betting on a crash -- one of the key abilities hedge funds have over traditional investment funds -- has been a painful strategy for years as central banks across the globe bought assets to prop up markets. Odey’s European Inc. hedge fund lost almost 50 percent in 2016 and a further 22 percent last year.

“Since the global financial crisis, the number of doomsayers has risen exponentially,” said Philippe Ferreira, a Paris-based senior cross-asset strategist at Lyxor Asset Management, which oversees about 73 billion euros ($85 billion) in so-called alternative and active strategies. “But...

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