Mayfair Hedge Fund Makes Tens of Millions in Profits from Tesco
Lansdowne Partners, one of the British largest hedge funds based in Mayfair, earned tens of millions from a big long-term bet against Tesco after the supermarket reported its fourth profit warning in less than a year.
Lansdowne
Partners, a Mayfair based hedge fund that manages $17bn of assets,
began short selling Tesco – effectively betting its shares would fall in
value – as far back as 2012, but has only begun to reap the rewards of
the trade in recent months as the UK retailer has tumbled in value.
The
hedge fund, which specialises in conducting extensive research to spot
long-term structural changes across different industries, identified
several years ago the competitive threat that hard discounters such as
Aldi and Lidl posed to the UK’s incumbent supermarkets, putting on bets
against both Tesco and rival Sainsbury.
Many
well-known UK high street retailers and leisure groups have become some
of the most popular targets of hedge funds in Europe as they have
struggled with both recession and structural disruption from internet
and low-cost competitors.
Source: Financial Times
