Short selling and Liberal Democrat hypocrisy

Daily Archives: September 29, 2008

Short selling and Liberal Democrat hypocrisy

September 29, 2008 9:10 pm by Jim Pickard

Lord Oakeshott, Lib Dem Treasury spokesman, was horrified by the idea that Tory donors might have short-sold stocks, HBOS in particular (see my previous blog).

But what of Paul Marshall, co-founder of hedge fund Marshall Wace, who has given the Lib Dems about £162,000 in recent years? Guido alludes today to the fact that Marshall Wace likes to short stocks.

What he doesn’t mention is that three separate funds run by the hedge fund were among those who disclosed short positions in HBOS after the FSA four-month ban on financial short-selling was brought in .

Oakeshott (pictured left) had described hedge funds which shorted HBOS as “wolves”. How come the discrepancy?

A Lib Dem spokesman says that the party has chastised short-selling despite having taken the Marshall donation. The Tories, by contrast, have refrained from any criticism. Not sure this explanation really washes.

And then there is Michael Brown, the controversial character who gave the Lib Dems £2.4m. Brown loved speculating in the City, although it is not clear if he went short as well as long.

Tags: Banks
Posted in Lib Dems, Recession, UK politics | Permalink

City Wolves, short-selling and the Church of England

September 29, 2008 10:36 am by Jim Pickard

Some readers may be excited by the fact that Tory donors have sold some equities short during the recent financial crisis. That may seem like a gift to Labour during these perilous times.

But this is a time for cool heads. Bear in mind that the last high-minded group to attack short-sellers – the Church of England – was revealed as hypocritical last week when it emerged that its own investment arm uses similar practices.

Not only does the church lend stocks to short-sellers but…I quote…

“As well as aiding shorting by lending stock, the church commissioners had £13m invested in Man Group, the biggest listed hedge fund manager, at the end of last year. The commissioners also sold a £135m mortgage portfolio last year, says their annual report, despite Dr Williams’ criticism of trading debts for profit.

“Through the Church of England pensions board, which manages another £847m, the church invested this year in a fund from Auriel Capital, a London hedge fund, which aims to make money from currency trading – including short selling currencies.”

Could any of the newspaper groups attacking the Tory hedge funds have any investments (direct or indirect) in the same vein? Or any of the Labour donors? Just a thought.

UPDATE: Jon Aisbitt, non-executive chairman of Man Group (one of the world’s largest hedge fund managers) gave £1m to Labour.