Hedge Fund Lansdowne Partners Increase Prudential Plc Short

Paul Ruddock and Steven Heinz's UK-based equity long/short hedge fund Lansdowne Partners has increased its short position in London listed financial services group Prudential plc (LON: PRU).

According to a filing made on October 6th, Lansdowne now hold a short position equivalent to -1.6% of Prudential's outstanding shares. The hedge fund has actually held a short in this company since 2009. In February 2009, their short represented -0.45% of outstanding shares and that position was gradually increased throughout 2010 and 2011 (now at its highest point).

Prudential Plc is Lansdowne Partners only disclosed short position in a UK listed financial company at the moment. As we have reported previously, during 2010 and 2011 Lansdowne reduced their shorts in Old Mutual (LON: OML), Legal and General (LON: LGEN) and Aviva (LON: AV.) to below the regulatory threshold of -0.25%.

In our September hedge fund performance numbers post, we highlighted that Lansdowne's $8 billion UK equity fund was -1.59% in September and -15.16% for the year at the end of September.

In other UK hedge fund activity, we also just detailed how hedge fund manager Odey added to their RSM Tenon Group Position. You can also read Odey's market outlook as well.

Per Goodle Finance - "Prudential plc (Prudential) is an international financial services group, with operations in Asia, the United States and the United Kingdom. Prudential is structured around four business units: Prudential Corporation Asia, Jackson National Life Insurance Company (Jackson), Prudential UK insurance operations and M&G. Prudential Corporation Asia's core business is life insurance, health and protection, either attached to a life policy or on a standalone basis, and mutual funds. It also provides selected personal lines property and casualty insurance, group insurance, institutional fund management and consumer finance (Vietnam only). In the fund management business Prudential holds a 49% stake in a joint venture with ICICI, in the People’s Republic of China, it had a 49 % stake in a joint venture with CITIC and in Hong Kong it has a 36% equity stake in a joint venture with Bank of China International."

Lansdowne Partners Buy Mwana Africa (LON:MWA)

UK hedge fund Lansdowne Partners have purchased 11.51% of Mwana Africa's (LON: MWA) outstanding shares. At first glance, it appears as though Lansdowne bought the majority of this stake via the recent placement. This position was revealed by UK regulatory filing.

This company mines various metals, including gold. Equity stakes in gold miners seems to be a popular investment amongst hedge fund managers as we just detailed Baupost Group's miner stake this morning.

In other activity from Lansdowne, we previously detailed the increase in their Gartmore stake. Paul Ruddock and Stephen Heinz head Lansdowne, one of the largest hedge funds in the world.

Per Google Finance - "Mwana Africa PLC (Mwana Africa) is engaged in the exploration, development and production of nickel, gold, copper and diamonds. It has four segments: gold, nickel, diamond and exploration. Mwana Africa has interests in gold, nickel and other base metals, and diamonds in Zimbabwe, the Democratic Republic of Congo and South Africa. Bindura Nickel Corporation (BNC), Zimbabwe, is situated near the town of Bindura, 90 kilometers northeast of Harare."

Lansdowne Partners Increase Gartmore Stake

Paul Ruddock and Stephen Heinz's hedge fund Lansdowne Partners recently filed a disclosure in UK markets regarding portfolio activity. Due to trading on February 1st, Lansdowne now hold 10.05% of Gartmore's (LON: GRT) voting rights or equivalents via a combination of shares and contract for difference (CFDs ~ we've penned a primer on CFDs here).

Back in November 2010, we highlighted that the hedge fund had built up a 6% holding just days after one of Gartmore's star fund managers, Roger Guy, had resigned. Lansdowne has added to their position in sizable fashion in recent months. For other activity from this prominent hedge fund, we posted about how Lansdowne reduced a short position.

Per Google finance "Gartmore Group Limited is a United Kingdom-based company engaged in the provision of fund management services. The Company is a traditional equity and alternative asset management firm, whose mutual funds, alternative funds and segregated mandates are distributed to clients in the United Kingdom, Continental Europe, North America, Japan and South America."

Stay tuned as we'll be posting up the latest letter from Lansdowne later this week on MarketFolly.com.

Lansdowne Partners Reduce Short in Legal and General (LON: LGEN)

UK hedge fund Lansdowne Partners recently disclosed activity on the London Stock Exchange. Paul Ruddock and Stephen Heinz's firm have reduced their short position in Legal and General (LON:LGEN). They have gone below the -0.25% threshold required to report a short position in the UK.

As such, it's difficult to say if they've covered their position entirely, or if they still maintain a smaller sized short position. Due to the reporting thresholds in place in the UK, we won't know unless they cross that line again.

Lansdowne held their short position in L&G for over two years as shares traded for less than 25p in January 2009 and today trade around 116p. We originally detailed this stake in our post on Lansdowne's short positions.  For other issues, there's LegalZoom.

Per Google Finance - "Legal & General Group Plc is a provider of risk, savings and investment management products in the United Kingdom. It operates in four segments: Risk, Savings, Investment management and International. The Risk segment includes individual and group protection, individual and bulk purchase annuities, general insurance and the housing network. The Savings segment includes unite trusts, individual savings accounts, investment bonds, non profit, pensions, structured products and with-profits products. The Investment management segment includes index funds, fixed income, risk management solutions, property and private equity. The International segment includes term insurance, group protection, wealth management and unit-linked savings."

Check out more hedge fund activity in the UK here.

Hedge Fund Lansdowne Reduces Short Position in Aviva

UK based hedge fund Lansdowne Partners has reduced their short position in Aviva (LON: AV). Paul Ruddock and Stephen Heinz's hedge fund have gone below the -0.25% shares outstanding threshold, meaning that they no longer have to disclose the position to UK regulators.

Just because they've reduced the short position does not mean they've covered entirely. In fact, they've gone below this threshold once before already this year. Here is a timeline of Lansdowne's short in Aviva (AV):

February 2009: Short -0.34% of shares outstanding
March 2010: Short reduced below the -0.25% reporting threshold
June 1th, 2010: Increased short position to -0.49% of shares outstanding
November 2010: Reduced below the threshold again

So, it's anyone's guess as to whether they've just reduced position size or covered completely here, we won't know unless Lansdowne comments on the position or adjusts their size again. In the past, we've taken a look at Lansdowne's other short positions as well.

As noted in our latest hedge fund performance update, Lansdowne was -3.87% for the year at the end of September. In terms of other portfolio activity from the hedge fund, we saw them acquire a position in Central Asia Metals (LON: CAML).

Taken from Google Finance, Aviva is "engaged in the provision of financial products and services, focused on long-term insurance and savings business, fund management and general insurance and health."

To see what else this hedge fund has been up to, check out all our posts on Lansdowne Partners here.

Lansdowne Partners Acquires Central Asia Metals (LON: CAML) Position

Steven Heinz and Paul Ruddock's hedge fund Lansdowne Partners have recently taken a 17.94% stake in Central Asia Metals (LON: CAML). Due to a regulatory filing in the UK, it shows that Lansdowne bought their shares on the 29th of September when Central Asia Metals listed in London and placed £38.1m shares. The company plans to use the money raised to build a SX-EW plant at Kounrad that will have the capability to produce 10,000 tonnes of copper cathode a year.

It's unclear as to whether the hedge fund acquired these shares in the IPO or on the open market, but given Lansdowne's prominence, we'd guess the former. For more coverage of this UK hedge fund, we recently detailed a portfolio update on Lansdowne.

According to Reuters, the "newly listed company is looking to sign the deals for when it ramps up copper production from its 60-percent owned Kounrad project in Kazakhstan at the end of next year, but is wary of setting prices too early."

Central Asia Metals plc is an AIM-listed UK incorporated company based in London. Its main countries of operation are Kazakhstan and Mongolia. CAML is a precious and base metals mining, exploration and development company with majority stakes in copper, gold and molybdenum projects throughout Central Asia.

In terms of other recent hedge fund activity in UK markets, we detailed that Harbinger Capital sold some of Inmarsat.

Hedge Fund Lansdowne Partners Covers Old Mutual Short Position

In the past, we've highlighted hedge fund Lansdowne Partners' short positions. This time around, we get word that they've actually covered one of these stakes. Due to trading activity on the 5th of July, 2010, Lansdowne has reduced their short in Old Mutual plc (LON: OML, pink sheets: ODMTY) to below the regulatory disclosure threshold of -0.25% of shares. Back in November 2009, Lansdowne's short in OML accounted for -0.49% of shares. Then, on July 1st, 2010 Lansdowne reduced it to -0.31% and now it has crossed below the -0.25% threshold.

It is entirely possible that Steven Heinz and Paul Ruddock's hedge fund still maintain a short position. The problem is, we won't know now as it's fallen below disclosure levels. Based on the pattern of their reduction though, it seems clear that they've been aggressive in ratcheting down this stake.

While hedge fund Lansdowne have covered the vast majority (if not all) of this short, they are still short the following companies according to the latest UK disclosures: Legal and General, Prudential plc, and Aviva. You can read up more on Lansdowne's short positions in our recent post.

Taken from Google Finance, Old Mutual plc "operates a financial services business and is engaged in the provision of long-term savings solutions, asset management, short-term insurance and banking solutions to customers worldwide. It also offers financial services in Africa through operations in Namibia, Zimbabwe, Malawi, Kenya and Swaziland. Its banking business in Africa is conducted by Nedbank Group, in which it has a 59 % controlling interest. The Company operates thorough a number of subsidiaries, including wholly owned Mutual & Federal Insurance Company Limited, the South African general insurance company, Skandia Life Assurance Company Ltd, which offers life assurance solutions, Skandiabanken AB, engaged in the banking sector, as well as Barrow, Hanley, Mewhinney & Strauss, Inc, an asset management company. Old Mutual plc operates in 34 countries worldwide. "

You can view our coverage of Lansdowne's new longs here as well as our posts on other hedge fund UK positions.

Hedge Fund Lansdowne Partners' Short Positions

Today we're examining short positions in UK financial companies taken by Steven Heinz and Paul Ruddock's hedge fund Lansdowne Partners. Currently, they have four shorts in Old Mutual (OML), Legal & General (LGEN), Prudential Plc (PRU), and Aviva (AV). Kindly note that Prudential is a company based in the UK, not to be confused with the US company of the same name.

Over the last few months, we've highlighted Lansdowne's short position in Prudential several times during the period where Prudential attempted to buy AIG's Asian business arm, AIA. This position has received a lot of attention from the financial media as many argued Prudential was overpaying for AIA. Lansdowne's short thesis seems to extend beyond the AIA bid though, because they held the position many months before the bid was even made and they have not completely covered their short even after Prudential's bid failed.

Currently, Lansdowne's short of Prudential Plc stands at -1.18% of shares outstanding. They previously were short to the tune of -1.46% of shares back on May 5th, 2010 so they have covered a partial position but still maintain quite a hefty bet. As you'll see from our examination of Heinz and Ruddock's other shorts, Lansdowne tend to hold their shorts for longer periods of time.

All of the short positions listed below are currently still open. Disclosure rules on short positions in UK financial companies state that fund managers who are net short a UK financial sector company are required to disclose the position if it is greater than 0.25% of the firm's issued share capital. In addition, the hedge fund must disclose each time it increases the short by 0.1% of issued share capital. Also, they must disclose when the position falls below the 0.25% threshold. For a full list of companies deemed 'financial sector companies,' head to the FSA website.

While these regulations are obviously tedious for the hedge funds themselves, it's a prime example of how UK governing bodies are increasing regulation and it's interesting to compare it to the SEC's requirements. The UK is more 'fun' for Market Folly because it reveals short positions of various hedge funds and we get to highlight these positions. In the United States, these positions are closely guarded and rarely revealed so it will be intriguing to see if the SEC steps up regulatory requirements regarding public disclosure of short positions. Over a year ago, we highlighted how rampant public disclosure of short positions could possibly be a bad idea. But at the same time, increased regulation is definitely needed so maybe a compromise would be revealing shorts to the governing bodies, but not releasing them publicly. That is an entirely separate debate that we'll save for another time.

Turning back to hedge fund Lansdowne Partners' short positions, we see that they have been short the insurance company Legal and General for well over a year. This is not the first time this company has appeared in our hedge fund portfolio tracking series either. Back in May, we saw that Ken Griffin's investment firm Citadel was short Legal and General as well. Since then though, Citadel have reduced the position under the 0.25% threshold. Below are tables breaking down Lansdowne's various short positions:

Legal & General (LGEN)
February 6th, 2009: Lansdowne was short -0.47% of shares
August 26th, 2009: They increased their short to -1.16%
November 12th, 2009: Increased to -1.76%
June 11th, 2010: Reported as -1.02%

Old Mutual (OML)
February 18th, 2009: Lansdowne was short -0.39% of shares
April 20th, 2009: -0.75%
May 7th, 2009: -0.51%
October 13th, 2009: -0.41%
November 27th, 2009: -0.49%

Prudential Plc (PRU)
May 22nd, 2009: -0.95%
December 10th, 2009: -0.79%
December 15th, 2009: -0.43%
April 26th, 2010: -0.97%
May 5th, 2010: -1.46%
May 28th, 2010: -1.18%

Aviva (AV)
February 13th, 2009: -0.34%
March 26th, 2010: fell below the 0.25% threshold
June 11th, 2010: -0.49%

So, after previously covering the majority of their short in Aviva back in March, Lansdowne has re-shorted the name. And, as you can tell from above, Lansdowne typically holds their core short positions for an extensive period of time, trading around partial positions in the mean time.

Last month, Lansdowne's UK Equity Fund was -3.98% for May but still up 0.67% for the year as detailed in our May hedge fund performance update. You can view our coverage of Lansdowne's new longs here as well as our posts on other hedge fund UK positions.

Hedge Fund Lansdowne Increase Short Position in Prudential (LON:PRU) Again

While we realize this is the third such update in a short span of time, it's rare you see public disclosures of short positions by hedge funds so we figured we'd provide as much detail as possible when we get the chance. Late last week we disclosed that UK based hedge fund Lansdowne Partners was short Prudential plc (LON:PRU - traded in London. It's not the American insurer that goes by the same ticker symbol). Then, we saw that they increased their short position from -0.32% of the company's shares to -0.42%.

We now see that Steven Heinz and Paul Ruddock's hedge fund firm have increased their short position in PRU a second time. Lansdowne Partners are now short -0.84% of the company's stock, essentially doubling their short position from the last time we detailed their position. This most recent disclosure represents their position as of April 22nd, 2010.

We've heard from contacts in the UK that shares of PRU on the London exchange are now hard to borrow with brokers wanting 3% interest if/when they locate the shares to short. So, Lansdowne have definitely created a stir here and there are obviously a few people piggybacking this trade. Keep in mind that this position is apparently a hedge to Lansdowne's long positions in UK banks. Last week we disclosed that Ruddock's hedge fund was also long Lloyds Banking Group (LON:LLOY, NYSE:LYG).

Performance wise, Lansdowne's UK Equity fund was up 8.28% through the end of March as we mentioned in our hedge fund performance numbers post from the first quarter. Additionally, in the past we've seen that their flagship fund has returned 19.37% annualized since 2001. When we took a look at Lansdowne's portfolio late last year, we also saw that they favored large cap plays in developed countries.

Hedge Fund Lansdowne Partners Increases Prudential Short Position

Steven Heinz and Paul Ruddock's prominent UK based hedge fund Lansdowne Partners have increased their short position in Prudential Plc (LON:PRU). American readers please keep in mind that this is not the Prudential that trades on the NYSE, it is a different company. Earlier this week, we initially reported that Lansdowne was short Prudential to the tune of -0.32% of Prudential's stock. Well, we just recently learned that Lansdowne has increased their short stake to -0.42% of the company's shares. On Wednesday when we disclosed that Ruddock's hedge fund was also long Lloyds Banking Group (LLOY), we learned that their short of PRU is effectively a hedge to their long positions in UK banks. So, it seems that they've boosted their hedge.

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."

You can view some of Lansdowne's other portfolio holdings here.

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.