Aurelius Dumps Co-op Bank Bonds

Dec 2 2013 | 7:04am ET

Less than a month after forcing the U.K.'s Co-operative Bank to end more than a century of mutual ownership, hedge fund Aurelius Capital Management dumped its interest in the company ahead of a crucial vote.

Aurelius sold its Co-op Bank bonds at a profit prior to Friday's vote on the £1.5 billion rescue plan formerly backed by Aurelius. Under that deal, which was approved by bondholders in spite of the hedge fund's move, Aurelius was to have become Co-op Bank's largest hedge fund shareholder.

Instead, as Co-op admitted that it was losing accounts and amidst a scandal involving its former chairman, Aurelius sold out to Perry Capital, which supported the deal crafted by Aurelius and Silver Point Capital. That rescue allows Co-op to avoid nationalization, while also leaving former parent Co-operative Group with just a 30%. Co-op Bank is expected to go public next year.

Aurelius bought up the Co-op Bank shares after the bank was downgraded in May.


In Depth

OmniQuest Capital: Why Funds of Hedge Funds Work

Aug 11 2016 | 4:47pm ET

There have been few sectors of the alternative investment universe under as much...

Lifestyle

Vortic: Making Great American Watches Again

Jul 25 2016 | 6:29pm ET

If you are compelled by stories of entrepreneurial vision & drive, or simply...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...