(Bloomberg) -- A former hedge fund manager who shot to fame for a $2.7 billion volatility trading gain during the global financial crisis is buying the pound on a day when the currency slumped to an all-time low. 

Stephen Diggle used 10% of the assets of a “small fund” to buy sterling to finance investments in the UK, especially stocks of companies that have earnings in the greenback but costs in the British currency, he said in an email. He didn’t specify the name and size of the fund. 

“I’m not calling a trading low. Who the hell knows?” said the Singapore-based investor. “But against a 5- or 10-year average sterling is very cheap now.”

Investors are dumping the currency after British Chancellor of Exchequer Kwasi Kwarteng vowed for more tax cuts, risking sending the country’s inflation rate and government debt surging. Sterling sank the most since March 2020, at the outset of the Covid-19 pandemic.

Diggle co-founded volatility hedge fund Artradis Fund Management Pte in 2001. Artradis earned its name for lucrative bets in 2007 and 2008. Later his family office Vulpes Investment Management Pte invested in assets including biotechnology ventures, avocado orchards in New Zealand, German real estate and European rearmament firms, whose stocks surged on the Russian invasion of Ukraine.

The sterling bet wasn’t just opportunistic currency trading, as the firm has investments in the UK that need the pound, Diggle wrote, adding that he doesn’t see why “the violent reaction to the mini budget is warranted.”

The UK’s debt-to-gross domestic product ratio is lower than most G7 countries, giving the government some headroom for such easing, said Diggle. “I like the tax cuts. Taxes in the UK had drifted too high and probably were stifling growth,” he said. 

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