Vultures prey on Brexit turmoil: Hedge funds make millions betting against British companies at risk from no deal cliff edge
- The short sellers have built up positions against banks, retailers and builders
- Some of the worst-hit stocks since Theresa May unveiled her draft Brexit deal have included Marks & Spencer, Berkeley Group and Intu and Hammerson
- Kier and Balfour Beatty have also plunged
Hedge funds are raking in millions of pounds betting against sterling and big UK companies as Brexit turmoil grips the markets.
The short sellers, who are betting the share prices of certain stocks will fall, have built up positions against banks, retailers and builders.
The bets have made speculators such as hedge fund boss Crispin Odey millions in recent days as shares in companies closely tied to the British economy tanked.
In the money: The bets have made speculators such as hedge fund boss Crispin Odey (pictured) millions
Some of the worst-hit stocks since Theresa May unveiled her draft Brexit deal have included Marks & Spencer, housebuilder Berkeley Group and shopping centre owners Intu and Hammerson.
Kier and Balfour Beatty, the UK’s two biggest construction groups, have also plunged.
Separately, some funds made a killing after betting the pound would fall against the dollar before it had its worst day of the year on Thursday.
Sterling recovered slightly yesterday but finance and housing stocks continued to slide.
Odey, who runs Odey Asset Management, said fears over whether Britain would crash out of the EU without a deal had boosted his fund’s coffers, telling the Times: ‘I have had a good day. Bad days tend to be good days for us.’
Odey, 59, a Brexiteer, is betting against Berkeley, Metro Bank, Intu, ITV and Debenhams.
He has complained about May’s deal, saying the PM got ‘completely mowed down and rolled over by Brussels’. He told Bloomberg the negotiations were ‘depressing’, adding: ‘If Brussels had wanted to write their own script six months ago, this is the script they would have written.’
Some of the worst-hit stocks since Theresa May unveiled her draft Brexit deal have included Marks & Spencer
Since reports emerged of the draft Brexit deal, when some stocks initially rose, nearly £400million has been wiped off the value of Berkeley, £171million off Metro, £84million off Intu and £123million off ITV.
Laith Khalaf, a senior analyst at Hargreaves Lansdown, said these stocks tended to suffer when traders worried about Brexit ‘heading down a dark alley’.
He added: ‘The fear is if Brexit goes badly, the economy will suffer and the profits these companies can make will be dented, and this concern is then manifested in weaker share prices.’
Other hedge funds set to profit from the market chaos include Marshall Wace and GLG Partners. Among the stocks being shorted by Marshall Wace, whose co-founders were split by the Brexit referendum, are Kier, M&S, Hammerson, Intu, Metro Bank, The Restaurant Group and Travis Perkins.
Marshall Wace’s two founders each gave £100,000 to the rival EU referendum campaigns, with chairman Paul Marshall backing Leave and chief executive Ian Wace backing Remain.
GLG Partners has positions in Kier, M&S and New River Retail, an owner of shopping centres.
But the fall in UK stocks was hailed by other fund managers as a buying opportunity.
Savvas Savouri, chief economist at Brexit-supporting Toscafund who has declared he has no problem with May’s deal, said last night: ‘Most well-regarded strategists are telling their clients to raise their weight in UK equities.’
A spokesman for Odey Asset Management declined to comment last night.
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