Paul Ruddock Interview – Lansdowne’s Returns and Performance

Bloomberg published a brief interview with Paul Ruddock, Lansdowne’s co-founder and chief executive. Ruddock has a law degree from Oxford University and worked at Goldman Sachs for four years three decades ago. He co-founded Lansdowne Partners in 1998 and fund currently has more than $14 Billion in assets under management. Ruddock’s net worth is estimated to be close to $450 Million. Here is an excerpt from the Paul Ruddock interview:

Wells Fargo & Co (NYSE:WFC)

Ruddock has shunned the media since his company got slammed for profiting from a short position in Northern Rock Plc, the lender that was nationalized after suffering the U.K.’s first run on a bank in more than a century. Newspapers said Ruddock made 100 million pounds on the collapse.

“It is public record that Lansdowne, on behalf of the funds that it managed, made significant profits from shorting Northern Rock,” he says. “We lost money on Northern Rock for two years on that short, then we made some money.”

“The large amounts of money some have quoted me making on Northern Rock are wildly exaggerated,” he says. “I am one of 18 partners, and in a typical year, there are always going to be some partners who make quite a bit more money than I do.”

Paul Ruddock really shuns the spotlight. Previously he contacted us and emphasized that he isn’t the sole owner of Lansdowne, he is one of the partners and the CEO of the company. Clearly he made the same point to Bloomberg as well.

Paul Ruddock told Bloomberg that Lansdowne is having a tough year. We can track their stock positions in the US. Lansdowne’s stock picks didn’t really underperform the market since the end of March. This is despite the fact that Lansdowne is heavily invested in mega-cap banks. It had $1 Billion in Wells Fargo (WFC), $640 Million in JP Morgan (JPM), $165 Million in Citigroup (C), and $85 Million in Morgan Stanley (MS) at the end of March. The losses in these stocks are in double digits. Lansdowne’s other picks performed much better. Coca-Cola ($1.4 Billion position) gained 4%, IBM ($900 Million position) gained 11%, Nike ($830 Million position) returned 20%, Intel ($850 Million position) gained 12%, and Accenture ($744 Million position) returned 9%.  Actually 10 of their top 12 picks managed to beat the S&P 500 index. Investors who imitated Lansdowne’s largest holdings ($250+ Million each) returned 5.2% since the end of March, vs. 1.3% loss for the SPY.