Guardian Unlimited- A hedge fund controlled by Jon Wood, the former star trader at investment bank UBS, has become the biggest shareholder in Northern Rock. The fund raised its stake to 8.5%, itemerged yesterday, indicating Wood’s determination to play a pivotal role in deciding the bank’s fate.
SRM Global, which first appeared on the crisis-stricken bank’s shareholder register in October, has joined other investors in calling for the Northern Rock auction to be scrapped to prevent a fire sale of assets. Along with the previous biggest shareholder, RAB Capital, and a significant number of smaller investors, it wants a vote on the sale of all or part of the bank.
A filing to the stock exchange yesterday showed SRM had bought 6.97m shares on Monday at around 109p each, taking its total stake to 35.8m shares.
Northern Rock’s shares rallied again. Despite rival bidders’ claims that Sir Richard Branson had undervalued the company and failed to answer many key questions about its financing, the shares rose 28% on Monday and another 7.8% yesterday to £1.18. Some in the markets put at least part of this week’s rise down to hedge funds that had been betting on share price falls closing their short positions.
