Lansdowne’s Main Fund Fell as Brexit Vote Jolted Global Markets

  • Flagship’s year-to-date loss widened by two percentage points
  • Equity hedge funds hit hard by referendum’s surprise result

Lansdowne Partners, one of Europe’s largest hedge fund firms, saw its biggest fund lose money last week as the U.K.’s vote to exit the European Union roiled markets.

The fund, which bets on and against stocks and was one of the best performers globally last year, extended losses this month to 4.1 percent as of June 24, according to an investor update seen by Bloomberg. The fund had been down about 1.8 percent for the month through June 17.  

A spokesman for the London-based firm declined to comment on the returns, which were reported earlier by the Wall Street Journal.

The U.K.’s vote Thursday to leave the European Union sent global equities into turmoil, wiping away trillions of dollars in market value, and prompting the pound to plummet to a three-decade low. The HFRX Equity Hedge Index declined 2.1 percent on Friday, the biggest drop across the main hedge fund strategies.

Meanwhile, computer-driven funds, which use algorithms to decide when to place bets, led the winners in the wake of the Brexit referendum. The HFRX Macro: Systematic Diversified CTA Index gained 0.7 percent on Friday.

Last week’s decline for the main Lansdowne fund widened its loss in 2016 to 13.7 percent, according to the investor update. Lansdowne’s Developed Markets Strategic Investment Fund fell 7 percent this month through June 24, bringing its year-to-date decline to almost 16 percent, the update shows.

Lansdowne has a stake in Lloyds Banking Group Plc, which plunged 21 percent on Friday. Shares of U.K. banks took the biggest hit among 10 industries since the Brexit vote. On Tuesday, Moody’s changed its outlook of 12 U.K. banks to negative from stable, as it expects the nation’s exit from the EU to reduce the banks’ profitability.

U.K.-based firms manage about 80 percent of the $527.6 billion in European hedge funds, according to Hedge Fund Research Inc., which oversees the HFRX indexes.

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