According to Reuters, Steven Heinz and Paul Ruddock's hedge fund Lansdowne Partners has built up a £1.1 billion position in Lloyds Bank (NYSE:LYG). They've calculated that this represents a 2.5% ownership stake in the bank. Keep in mind that the U.K. government owns over 40% of the company as well. There has not been a regulatory filing regarding Lansdowne's position as its stake is below the 3% threshold that requires a disclosure. What's interesting here is that on Wednesday we revealed Lansdowne's new short position in Prudential (NYSE:PUK) and this position is said to be a hedge to its long positions in U.K. banks.
The hedge fund firm apparently believes that Lloyds should trade at a higher book value. It appears as though Lansdowne has flipped its view on banks as it had previously been short financial firms throughout the crisis. Heinz and Ruddock's firm now joins hedge fund colleagues GLG Partners who also have a position in Lloyds after recently exiting its stake in Barclays (NYSE:BCS) in favor of this bank. Lansdowne's U.K. Equity fund was up 8.28% through the end of March as noted in our first quarter hedge fund performance numbers.
Taken from Google Finance:
Lloyds Banking Group plc is "a financial services group providing a range of banking and financial services, primarily in the United Kingdom, to personal and corporate customers. The Company operates in four segments: Retail, Wholesale, Wealth and International and Insurance. Its main business activities are retail, commercial and corporate banking, general insurance, and life, pensions and investment provision."