Hedge Fund Lansdowne Partners Discloses Short Position ~ market folly

Tuesday, April 20, 2010

Hedge Fund Lansdowne Partners Discloses Short Position

UK based hedge fund Lansdowne Partners has re-opened their short position in British life assurer Prudential Plc (LON:PRU). The hedge fund's bet represents -0.32% of Prudential's outstanding stock, approximately £47 million worth. This is not the first time they've been short Prudential as they previously had a larger short position in this name back in December. Prudential Plc is expected to disclose details of their $20 billion capital raise to finance a $35.5 billion acquisition of AIA, the Asian insurance division of AIG. Please keep in mind that the company referenced above (UK based Prudential) has no ownership link with Prudential of America, a company the majority of you will be familiar with that trades under the ticker PRU on the NYSE. Make sure you don't confuse them.

Lansdowne found success on the short side of their portfolio during the financial crisis as they profited off their shorts in Northern Rock and Barclays. But then again, almost all hedge funds had some sort of success with their shorts back then. For more details on on the disclosure rules for long and short holdings in UK companies see our UK primer here.

Lansdowne of course have constantly been rated as one of the top hedge funds in London and they specialize in long/short stockpicking (although they also employ other strategies as well). Their UK Equity fund was up 8.28% through the end of March as noted in our first quarter hedge fund performance numbers. Late last year we saw that their flagship fund has returned 19.37% annualized since 2001 when we took a look at Lansdowne's portfolio and saw they favored large caps in developed countries.

Taken from Google Finance, Prudential is "a financial services company. The Company has operations in the United States, Asia, Europe and Latin America. Through its subsidiaries, it offers products and services, including life insurance, annuities, retirement-related services, mutual funds, investment management, and real estate services."

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