Hedge Fund Lansdowne Partners Long Lloyds Banking Group (LLOY) ~ market folly

Wednesday, April 21, 2010

Hedge Fund Lansdowne Partners Long Lloyds Banking Group (LLOY)

According to Reuters, Steven Heinz and Paul Ruddock's hedge fund Lansdowne Partners has built up a £1.1 billion position in Lloyds Bank (LON:LLOY, NYSE:LYG). They've calculated that this represents a 2.5% ownership stake in the bank and keep in mind that the UK government owns over 40% of the company as well. There has not been a regulatory filing regarding Lansdowne's position as their stake is below the 3% threshold that requires a disclosure. What's interesting here is that yesterday we revealed Lansdowne's new short position in Prudential and this position is said to be a hedge to their long positions in UK banks.

The hedge fund firm apparently believes that Lloyds should trade at a higher book value. It appears as though Lansdowne has flipped their view on banks as they had previously been short financial firms throughout the crisis. Heinz and Ruddock's firm now joins hedge fund colleagues GLG Partners who also have a position in Lloyds after recently exiting their stake in Barclays in favor of this bank. Lansdowne's UK Equity fund was up 8.28% through the end of March as noted in our first quarter hedge fund performance numbers.

Taken from Google Finance, Lloyds Banking Group plc is "a financial services group providing a range of banking and financial services, primarily in the United Kingdom, to personal and corporate customers. The Company operates in four segments: Retail, Wholesale, Wealth and International and Insurance. Its main business activities are retail, commercial and corporate banking, general insurance, and life, pensions and investment provision."

For more on Lansdowne, you can check out their new short position here and our past look at some of their portfolio holdings.

blog comments powered by Disqus