market folly

To comply with new UK regulations, hedge funds are being forced to disclose financial short positions. Two very well known hedge funds whom we've covered a lot here on Market Folly have already disclosed their positions. Firstly, Blue Ridge Capital is ran by John Griffin, a 'Tiger Cubs' (a.k.a. pupil of Julian Robertson while at Tiger Management). Griffin is well known because he was Julian Robertson's right hand man. So, needless to say, the dude knows his stuff. Blue Ridge seeks absolute returns by investing in companies who dominate their industries and shorting the companies who have fundamental problems. I've covered Blue Ridge's latest long positions here, but now we finally get to see some of what he's shorting. According to a disclosure made in the UK, Blue Ridge is short 0.95% of the shares of Alliance & Leicester PLC. Additionally, they have a short position in Anglo Irish Bank.

Another fund we're seeing some short positions from is John Paulson's Paulson & Co. Paulson is famous for the fortune he made by betting against subprime at the beginning of the crisis. And, now, it looks as if he's ready to turn his focus to some UK financials. Taken from StreetInsider, we get a solid breakdown of what Paulson is shorting: "Paulson & Co. yesterday disclosed short positions in four of the five largest British banks. The bet now makes Paulson the largest short seller of UK banks. According to the filing, Paulson's hedge fund has taken a $650 million bet against shares of Barclays (BCS), a $542 million bet against Royal Bank of Scotland (RBS), and a $483 million bet against Lloyds TSB (LYG)."

If you're interested in seeing how Paulson and various other hedge funds have performed year-to-date, check out my hedge fund performance update posts from July here and from September here.


Sources: WSJ, StreetInsider, & investEgate