Odey Asset Management is among a number of hedge fund firms that have cut back on bets against Baillie Gifford’s Scottish Mortgage Investment Trust after a large fall in its share price, according to a report by the Financial Times.
The report cites an investor update from James Hanbury, who runs Brook Absolute Return and Developed Markets at Odey, as revealing that the fund had pared back its short positions in the £13.4 billion, London-listed investment trust, despite ongoing concerns over board governance and exposure to risky private companies.
The move is a sign that Hanbury, and other investors, believe that tech-focused Scottish Mortgages’ share price is nearing the bottom after a difficult 12 months. The sell-off in tech stocks has seen the trust’s share price plummet by almost 60% from its all-time high in late 2021 and it is now trading at a 20% discount to its net asset value.
Hanbury is not alone in reducing his bets against Scottish Mortgage, with data from S&P Global Market Intelligence showing that the percentage of the trust’s shares currently on loan has dropped to 0.1 per cent from nearly 1 per cent last summer and close to 0.7 per cent at the start of this year.
