Lansdowne fund hit by 2011 slump

HEDGE fund Lansdowne Partners has emerged as the latest casualty of a dire 2011 for the industry with a slump of more than a fifth at a key British fund.

The Lansdowne UK Fund lost 20.07 per cent last year, its first annual loss since it was launched 10 years ago.

The $1.7 trillion (£1.1 trillion) hedge fund industry had a wretched year in 2011, with the average fund dropping 4.8 per cent and some stock-focused funds suffering an average decline of 19 per cent, according to research compiled by Hedge Fund Research and Bank of America Merrill Lynch.

Lansdowne’s fund was hit because of its exposure to the financial services sector. Its shareholding in Lloyds Banking Group is second in size only to that of UK Financial Investments, which manages the government’s stakes in the bailed-out lenders.

Lansdowne, which made millions of pounds by shorting banking stocks such as Barclays and Anglo Irish during the crisis, is known for its connections to politics.

In 2010 it hired Tony Blair to give a small number of geopolitical talks to its executives and co-founder Sir Paul Ruddock has donated to the Conservative Party.