SJP securities lending more than doubles at Blackrock

Shorts against wealth manager have been higher than average since March

Blackrock has more than doubled the amount of St James’s Place (SJP) securities it has on loan in the aftermath of the wealth manager’s H1 results.

The asset manager currently has a 6.13% position in SJP with 1.25% on loan as of Friday, a regulatory filing published this week showed. Previously, it had 0.47% on loan.

AQR Capital Management, Marshall Wace and GLG Partners all have net short positions in SJP totalling 2.61%, according to the FCA, which publicly discloses all positions higher than 0.5%.

Blackrock’s ramping up of securities lending comes just over a week since SJP published its H1 2019 results, in which it boasted its clients were spared being trapped in Neil Woodford’s suspended fund due to its segregated mandate with the equities manager.

While £4.4bn net inflows were lower than expected, analysts at JP Morgan Cazenove and Citi continued to back SJP’s resilient business model pointing to its record high £109.3bn assets under management.

Disclosed shorts in SJP reached 3.11% on 24 July falling to 1.98% on 30 July, the day before its results, according to shorttracker.co.uk. Net disclosed shorts have now crept back to 2.61%.

Since March, net disclosed shorts in SJP have been above 1.22%, compared to the previous four years, when they have not exceeded 0.9% and for the two years leading up to January 2019 have been virtually non existent.

SJP is not alone in the investment industry for attracting the attention of short sellers.

American investor Steven Cohen is among the hedge funders circling Jupiter and Schroders, which currently have net disclosed shorts on their stock of 7.24% and 1.24% respectively.

Additionally, 3.12% of Hargreaves Lansdown stock is currently being shorted by AQR, Lansdowne Partners and Marshall Wace.

Brexit and trade tensions, as well as the Woodford fund suspension, are among the reasons hedge funders are betting against the industry.

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