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Paulson loses on Barclays short position

PROMINENT hedge fund manager John Paulson has abandoned his fund&rsquo;s short position on Barclays, losing an estimated &pound;100m in the process.<br /><br />The loss will be particularly keenly felt because New York-based fund Paulson closed its position just a day before Abu Dhabi&rsquo;s International Petroleum Investment Corporation opted to offload 1.3bn shares in Barclays, pushing the bank&rsquo;s share price down five per cent.<br /><br />Paulson reduced its short position in the bank from 1.17 per cent to below 0.25 per cent &ndash; the threshold at which it must be disclosed &ndash; on 2 June, according to a filing with the London Stock Exchange.<br /><br />The hedge fund had been shorting Barclays since September of last year, at one stage bagging a &pound;6.3m paper profit in just a few hours as the bank&rsquo;s share price fell by four per cent on the morning of 18 November.<br /><br />Paulson is thought to have lost &pound;100m by holding its short position from November until now as Barclays shares have rocketed more than fivefold since they hit a low of 51p in January. The precise loss is not known because it has not been disclosed whether Paulson has exited the position entirely.<br /><br />Paulson is still one of the world&rsquo;s top hedge fund performers, largely on the back of last year&rsquo;s bets against sub-prime mortgage-backed securities and UK financials such as Royal Bank of Scotland.