A brace of U.S. hedge funds with links to legendary hedge fund manager Julian Robertson have built a short position in Royal Mail, the parcel deliverer part owned by the U.K. government.
Blue Ridge Capital, launched in 1996 by ‘Tiger Cub’ John Griffin, currently has a short of position worth around £34 million ($51.3 million) in Royal Mail. Blue Ridge first declared a short of 0.63% on Sept. 24. The following day it upped it to 0.75%. If a hedge fund has a short position of over 0.5% in a company’s stock, it has to declare it to the U.K. regulator.
Mr. Griffin is a protégé of Mr. Robertson, who founded Tiger Management, one of the earliest hedge funds, in 1980.
Alongside Blue Ridge is Emerging Sovereign Group, a New York-based hedge fund founded by a trio of former Morgan Stanley traders with seed capital from Mr. Robertson. The fund, majority owned by private equity giant Carlyle Group, has a short position in Royal Mail of 0.53%.
The fund declared the position on Sept. 14.
The short positions come at an interesting time for Royal Mail. The parcel deliverer hired Rothschild in June to advise the government on how to offload its then 30% stake.
At the time, Finance Minister George Osborne said there was “no reason” why the government needed to continue holding a minority stake in Royal Mail, and added a sale was timetabled for the end of the financial year.
Rothschild quickly orchestrated a 15% sell-down in mid-June at £5 a share.
Royal Mail’s share price is currently trading at £4.57, some 43.9% up from its controversial IPO price in 2013, but 9% below its June sell down price.
Although Royal Mail is being targeted by a brace of hedge funds, the company is backed by some high profile names.
Its largest investor, not including the U.K. government, is Woodford Investment Management, which has steadily built a 5% holding over the past year. Norges Bank Investment Management and the Singapore sovereign wealth fund are also major investors.
Royal Mail declined to comment. Blue Ridge could not be reached for comment. Carlyle did not respond to requests for comment.