Lansdowne Partners retreats from short selling after losses
◆ One of London’s oldest hedge funds is to retreat from short selling by shutting down its main £2.2bn fund after losses, writes Michael O’Dwyer.
Lansdowne Partners, which was once seen as the gold standard for equity investors, has suffered years of poor returns in its
Lansdowne Developed Markets Fund. The longshort fund backs firms that its managers think will grow and bets against those which they expect will suffer a share price decline.
Lansdowne, which manages a reported $9.8bn (£7.8bn) of client money, is believed to have been hit by its bullish outlook on the UK and the airline sector.
The firm told investors that it had become harder to make money by betting against companies and that it believed now was an excellent time to back listed companies.
It added: “Excessive short-termism has created valuations which are extreme.” Investors in the Developed Markets Fund are now being allowed to withdraw their cash or switch to one of the publicity-shy firm’s other funds, Institutional Investor reported.
Lansdowne Partners declined to comment.