Lansdowne Partners’ flagship hedge fund draws shutters on shorting, switching focus to long-only investing

London

Lansdowne Partners, the long-running London-based hedge fund firm, is restructuring its flagship Developed Markets Fund to focus solely on long-only investments, and will no longer employ short-selling in the strategy, in a major shift in focus for the high-profile manager.

Peter Davies, who co-manages the Lansdowne Developed Markets Fund’s portfolio alongside Jonathon Regis, believes the long book opportunities going forward are more appealing than the potential for shorts, and is closing the hedge fund part of the strategy.

Lansdowne, which was established in 1998 by Sir Paul Ruddock alongside Steven Heinz, reportedly manages around USD9.8 billion today across various funds, having seen firm-wide assets peak at roughly USD20 billion in 2007.

Ruddock retired in 2013, with Heinz stepping down the following year, with Davies, who joined Lansdowne from Mercury Asset Management in 2001, taking the reins alongside Stuart Roden, who later left Lansdowne in 2018 after 17 years.

While the hedge fund element of the Lansdowne Developed Markets Fund will no longer operate, Davies and Regis will continue to manage money at the firm.

Lansdowne’s range of other hedge fund strategies - which includes the global renewables-focused Lansdowne Energy Dynamics Fund, led by former Norges Bank Investment Bank utilities portfolio manager Per Lekander – are unaffected by the restructuring.

The Developed Markets strategy, which reportedly has some USD2.8 billion in assets, is understood to have suffered hefty losses during 2020’s market turmoil, reportedly falling more than 23 per cent in the first half of this year.

According to media reports this week, existing investors in the fund have been given the option to either redeem their money or redeploy it into the Lansdowne Developed Markets Long-Only Fund or a new vehicle focusing on smaller start-up firms.

A spokesman for Lansdowne declined to comment on the restructuring of the fund or its recent performance.