Multi-strategy hedge fund major Citadel has taken a sizeable bearish position against shares of the Magnum Ice Cream Company, just weeks after the business was spun out of consumer goods group Unilever, according to a report by the Financial Times.
The report cites regulatory disclosures as showing that the Miami-based hedge fund has built a net short position equivalent to 0.69 per cent of Magnum’s issued share capital. Based on the company’s market capitalisation of around €8.3bn (£7.3bn), the position is valued at roughly £50m.
Magnum, which owns brands including Ben & Jerry’s, Cornetto and Carte d’Or, listed earlier this month following its demerger from Unilever. The shares are primarily listed in Amsterdam, with a secondary listing in London. While the stock has risen since the separation, analysts have warned it could face selling pressure as it has yet to be included in major stock indices, potentially triggering sales by passive funds.
Citadel, which manages about $72bn in assets, declined to comment on the rationale behind the short position. The firm’s equities business typically follows a market-neutral strategy and is active across a wide range of listed securities. Nevertheless, disclosed short positions by large hedge funds are closely watched by investors, particularly when taken by high-profile firms such as Citadel, one of the industry’s most consistently profitable players.
Unilever retains a 19.9 per cent stake in Magnum following the demerger and plans to sell down its holding over the next five years. The spin-off has also inherited governance challenges linked to long-running tensions with Ben & Jerry’s over the brand’s political activism, which have resurfaced since Magnum became an independent company.
