John Griffin's Blue Ridge Capital Reveals Short Position ~ market folly

Wednesday, January 13, 2010

John Griffin's Blue Ridge Capital Reveals Short Position

Disclosures of short selling in UK financial companies by hedge funds have been few and far between during the last six months. However, we've been able to track down a short sale because we follow hedge fund disclosures in UK markets.

Yesterday, the London Stock Exchange news service revealed that John Griffin’s Blue Ridge Capital was short 0.24% of Legal and General's common shares (FTSE: LGEN) on the 8th of January. This is a rare glance into a prominent hedge fund's short book as these firms typically keep these positions closely guarded. However, when they are required to file a disclosure (as is the case here), we get an occasional taste. You can view the rest of Blue Ridge's portfolio here.

Blue Ridge is not the only hedge fund shorting Legal and General as London based hedge fund manager Meritor Capital also held a 0.37% short position on the 8th of January. Meritor are fundamental stock-pickers that place emphasis on understanding businesses at ground level and meeting regularly with company management. They support this process with retained advisers, industry consultants and field visits.

Fellow UK hedge fund firm Lansdowne Partners have also had a short position in Legal and General fairly recently as they were short 1.76% of LGEN's shares on the 11th of November 2009. See our coverage of Lansdowne's portfolio here.

Just yesterday we talked about the fact that many hedge funds took it on the chin from their short positions in 2009 and examined the common link in companies they were shorting. There has always been an aura of mystique around short selling given the high level of secrecy. So, when we finally get a chance to see what they're shorting, it's exciting. We've gotten tastes of this recently when we saw some short positions from Whitney Tilson's hedge fund T2 Partners, and in the past through Bill Ackman's short of Realty Income, and David Einhorn's short of the ratings agencies. We'll continue to reveal these positions as we find them.

From Google Finance - Legal & General Group Plc is "a provider of risk, savings and investment management products in the United Kingdom. It operates in five segments: Risk, Savings, Investment management, International, and Group capital and financing. The Risk segment includes individual and group protection, individual and bulk purchase annuities, and general insurance, together with estate agencies and the housing related business conducted through its mortgage network. The Savings segment comprises non profit investment bonds, non profit pensions, individual savings account, retail unit trusts, and all with-profits products. The Investment management segment comprises institutional fund management and institutional unit trust business. The International segment comprises businesses in the United States, France, the Netherlands and emerging markets. On June 5, 2008, the Company acquired Suffolk Life Group Plc."

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