Marshall Wace is a successful UK based hedge fund which has a large number of short positions in European equities. Marshall Wace has 31 short positions above the 0.5 percent (see older positions-historical data). The number is pretty large as only BlackRock, Inc. (NYSE:BLK), an asset manager with almost four trillion AUM and AKO Capital have disclosed more short positions than Marshall Wace.
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Marshall Wace has more than $7.7 billion under management in its hedge funds as of Dec 2012. The hedge fund was founded by Paul Marshall and Ian Wace. The flagship MW Eureka is up 7 percent through March 12, MW Core has gained 4.6 percent, MW GLOBAL OPPORTUNITIES is up 5.5 percent. Some of MW’s most significant short positions are in the banking sector of Europe where it is has bearish bets in Italian, Spanish and even German banks. While it is impossible to recount all short positions, here are the most prominent ones:
Marshall Wace has a short equal to 1.3 percent of Commerzbank AG (ETR:CBK) (FRA:CBK) (PINK:CRZBY) outstanding shares, which is roughly equivalent to $113 million. The position was declared in mid of February and has been increased since then. Shares of Commerzbank are down 24 percent since February. The German bank is also a short position of Steve Cohen’s SAC Capital. The second largest bank of Germany is planning to sell shares worth more than $3 billion. Commerzbank is attempting to raise capital for paying back the bailout funds it recieved in 2008. Commerzbank AG (ETR:CBK) (FRA:CBK) (PINK:CRZBY) has been rated as Sell by most analysts recently and has a consensus rating of Hold.
Marshall Wace also has a short in a smaller real-estate bank, Aareal Bank AG (FRA:ARL) (ETR:ARL) (PINK:AAALF). The position is worth approximately $6 million.
A Short in Spanish bank, Banca Monte dei Paschi di Siena SpA (BIT:BMPS) was raised to over one percent of outstanding shares by Marshall Wace; again this one has been making profits for the London based hedge fund. The position originally was disclosed on March 1st. Banca Monte is down -18 percent since then. Banca Monte has been mired in controversy, its top executives have been fined for their lax risk management.
Marshall Wace also has a short bet in Unione di Banche Italiane Scpa which is a holding company controlling a group of nine network banks of Spain. MW’s short is worth $41 million, the stock has declined over 17 percent since Marshall Wace disclosed the position.
Banco de Sabadell (MCE:SAB) (PINK:BNDSY) is a Spanish bank with $5.4 billion market cap. Marshall Wace is short 0.7 percent of the outstanding shares. Sabadell did not need bailout funds for rescue but has been writing down losses from real estate assets. The stock has declined 29 percent in 2013.
Fiat SpA and Peugeot
The two automobile companies are short positions of Marshall Wace, the bet against Fiat SpA (BIT:F) was initiated in February while Peugeot SA (EPA:UG), the French automaker, was initiated last year. The short in Fiat SpA (BIT:F) (PINK:FIATY) is equal to 0.8 percent of the outstanding shares and is worth $50 million. The Position in Peugeot SA (EPA:UG) (PINK:PEUGY) is slightly smaller. The European automakers have seen declining demand across all EU economies, even in EU’s star performer Germany, where deliveries have fallen 17 percent.
Koninklijke KPN N.V. (AMS:KPN) (PINK:KKPNY) is a telecom and ICT provider based in Netherlands. The MW short was disclosed in early February. KPN is down 18 percent in the past 60 days. At one percent of shares, Marshall Wace has bet $48 million against the company.
Interestingly, Marshall Wace does not have many big short positions in its home Country. The hedge fund is betting against Fenner plc (LON:FENR), London Mining Plc (LON:LOND) (PINK:LIIGF) , Man Group Plc (LON:EMG) and Bowleven PLC in UK, all of which are small cap equities. However, MW not making many wrong moves; most of the shorts have declined in 2013.