Lansdowne UK Fund Down 20%

Jan 17 2012 | 12:53pm ET

Add Lansdowne Partners to the list of high-profile hedge funds suffering a big come-down last year.

The London-based firm's UK Fund's first-ever annual loss was a big one. The fund fell 20.07% in 2011, Financial News reports. The 10-year-old fund was hardest hit by financial stocks, namely JPMorgan Chase, Wells Fargo and Lloyds Banking Group.

Fund managers Peter Davies and Stuart Roden acknowledged that they were "overly blasé about short-term uncertainty, especially insofar as it related to political developments" and "failed to conceive of the degree to which core solvency (rather than profitability levels) would re-emerge as a consideration for investors." But the two said they'd stick with financials this year, promising that the sector offered a "mis-pricing" opportunity.

"Given deposit funding, economies of scale, sale of non-loan products and back books of business that are typically less price-sensitive than the marginal customer," meaning bank stocks should rally this year.


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