Odey Discloses Short Position in Provident Financial (LON: PFG) ~ market folly

Tuesday, October 26, 2010

Odey Discloses Short Position in Provident Financial (LON: PFG)

Crispin Odey's hedge fund firm, Odey Asset Management, has disclosed a new short position in Provident Financial (LON: PFG). Per regulatory disclosures, we learn that Odey is short -0.64% of Provident's total shares outstanding due to trading on the 21st of October. Last week, we highlighted another new short position Odey disclosed as well.

Interestingly enough, Blackrock's Absolute Alpha hedge fund also disclosed a short in Provident of -0.36% total shares outstanding due to trading on the same day as Odey. Provident Financial specializes in providing loans to people on low incomes. It's possible that hedge fund are shorting Provident under the assumption that the stringent welfare cuts being implemented by UK's conservative government will hit their customer base particularly hard.

We can track short positions in UK companies that have been deemed "financial companies" by the Financial Services Authority (FSA). To see how this can be done, see our primer on the disclosure of short positions in the UK here.

Taken from Google Finance, "Provident Financial plc is a financial services company engaged in the provision of personal credit products for consumers in the United Kingdom non-standard lending market. The Company has four business segments: Consumer Credit, Vanquis Bank, Yes Car Credit and Central. Its Consumer Credit segment provides small loans, home credit loans and large loans for consumers. It provides home credit products through the Provident Personal Credit and Greenwood Personal Credit brands, as well as larger loans than traditional weekly collected home credit through its Real Personal Finance brand. Its Vanquis Bank segment operates in the non-standard sector of the United Kingdom credit card market and provides credit cards for consumers. It holds a banking license and takes retail deposits. Its Yes Car Credit segment has been transferred to central activities following closure of the collections operation in 2009. Its Central segment operates its business through Provident Investments plc. "

For more from this particular hedge fund, you can head to manager Crispin Odey's past market commentary.

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