Monday 21 October 2019 2:57 pm

Hedge fund Lansdowne bets on market reversal in major portfolio shakeup

Hedge fund Lansdowne Partners has reportedly undergone a major repositioning of its portfolio, betting that financial markets are nearing a reversal that will lead to falling bond prices and a slump in tech stocks.

Read more: Thomas Cook collapse set to net hedge funds millions

Lansdowne, one of Europe’s biggest hedge funds, is predicting a major overhaul of dominant market trends, the Financial Times reported. The firm now expects governments to issue more debt to fund increased spending, which could cause the price of bonds and some stocks to drop.

The paper quoted a person close to the firm – which has around $15bn (£11.5bn) of assets under management – as saying the portfolio shakeup would lead to a significant increase in Lansdowne’s exposure to UK equities as political uncertainty begins to subside.

“UK companies are significantly mispriced,” they said. “The UK economy is structurally in a very good position. If you compared UK and US unemployment, it would be difficult to differentiate the two, and yet the narratives are radically different.”

The source said Lansdowne is now betting that the price of technology stocks will fall because “valuations are super-high”, having offloaded positions in Amazon and Google in the past year.

Read more: Hedge funds row back on controversial fee structure

Lansdowne is one of the largest and most influential hedge funds in Europe, but is notoriously secretive, and does not even disclose its biggest bets to investors.

Lansdowne declined to comment on the reports.

Main image credit: Getty