Lansdowne ditches stake in Goldman

LANSDOWNE Partners, one of Europe’s biggest hedge fund firms, has sold its $850m (£522.7m) stake in Goldman Sachs as part of a move out of investment banks burdened by regulation and into retail banks, a source close to the situation said.
By The Newsroom
Published 2nd Aug 2011, 12:37 BST

London-based Lansdowne, which manages $16 bn in assets and which has a large position in Lloyds Bank, sold its stake in Goldman at the beginning of the year, the source said yesterday.

The firm’s move was not specifically related to Goldman but instead a call on the investment banking sector and driven by a range of concerns including US financial regulation, the source added.

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Goldman’s shares are down 20 per cent since the start of the year, in part on worries over the effects of the Dodd-Frank law pushing banks to cut back on proprietary trading and risk taking.

Last month, Goldman posted earnings and revenue far below analysts’ already-reduced expectations, while it has also seen high-flying executives such as Pierre-Henri Flamand and Morgan Sze exit to set up hedge funds ahead of the new rules.

The change in investment strategy comes in a tough year for Lansdowne, which made millions shorting banks during the financial crisis but whose flagship UK fund is down 11 per cent so far this year. Both Lansdowne and Goldman declined to comment.

Last year, Goldman launched a pioneering project in Yorkshire to help unlock the economic growth and job creation potential of small businesses and social enterprises. It is funding a pilot business education programme for 25 entrepreneurs from across the region who have been chosen for their high growth capacity.

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