One of the world's largest pension schemes has been revealed as a leading short-seller of the largest water companies listed on the London Stock Exchange.
According to data from the Financial Conduct Authority, the £336bn Canada Pension Plan Investment Board has built up bets against the share prices of United Utilities and Severn Trent.
Short-selling enables investors to generate profits from falling share prices.
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It is used by the Canadian fund, like many others, as a hedging strategy to offset against potential losses on investments elsewhere in its equities portfolio.
The fund is the only investor with an outstanding short against Warrington-headquartered United Utilities that is large enough to require being disclosed to the City regulator.
It is also one of only two funds to have bets disclosed against Coventry-headquartered Severn Trent.
The FCA requires investors to publicly report their shorts if their bets reach 0.5% of a company's issued share capital.
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Canada Pension Plan Investment Board is betting against the two businesses despite holding a 32.9% stake in Anglian Water, which it has backed since 2006.
However, it is understood that the investment in Anglian Water is run by a separate part of the fund.
At the end of June, United Utilities defended its financial position in the wake of the crisis at counterpart Thames Water.
The South East provider had been in the national headlines amid fears it may collapse under a debt pile of £14bn.
Over the last year, shares in United Utilities have dropped from over 1,100p to 974p.
Shares in Severn Trent have fallen from almost 3,000p to 2,479p over the same time.