The Daily Telegraph

Investor bets against UK’S biggest broker Hargreaves hit record high

- By Lauren Almeida

A RECORD proportion of investors are betting against Hargreaves Lansdown amid growing anxiety about the fortunes of Britain’s biggest broker.

More than 5pc of Hargreaves shares are now being shorted – used by investors to bet that the company’s value will fall. It is the seventh most shorted stock listed in London, according to analysis of regulatory filings by Castellain Capital, an investment manager.

Six companies – including the world’s largest asset manager, Blackrock, and hedge fund Marshall Wace – have declared new shorts in the broker. It follows a 38pc fall in Hargreaves’ share price this year. A “short” is when an investor borrows shares of a company and sells them on the open market – promising to buy them back at a lower price. Any profit from this represents a successful bet that the company’s share price would fall.

At the start of the year, less than 1pc of Hargreaves shares were being used for shorting but this has spiked to 5.8pc – the highest level since the City watchdog, the Financial Conduct Authority, started tracking data in 2012.

Julian Roberts, of the broker Jefferies, called a short against Hargreaves Lansdown an “easy bet” given broader market volatility. Falling share prices across the globe impact the amount of assets the company manages and, therefore, fees it can charge its customers. Hargreaves operates a “percentage fee” model meaning it takes a fixed proportion of its customers’ savings each year.

Online retailer Boohoo remained the most shorted stock in London, with 8pc of its shares used to bet against its rise.

Hargreaves Lansdown declined to comment.

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