Lansdowne Partners is a London-based hedge fund co-established by Paul Ruddock and Steve Heinz in 1998. The investment firm is one of the oldest and longest-running hedge funds in Europe and is also considered to be one of the most successful hedge funds in London. Paul Ruddock, one of the founders of Lansdowne Partners and a former head of international business at Schroders, retired in 2013 but still remains a significant shareholder. Meanwhile, Steve Heinz, a former Harvard Management Company equity arbitrage specialist, left the hedge fund in 2014 but still remains involved in the fund’s management. Currently, Lansdowne Partners’ management control has been taken over by Peter Davies and Stuart Roden since the co-founder, Heinz, stepped away in 2014. In the meantime, Alex Snow, a hedge fund manager well-known for betting against British banks during the financial crisis, serves as the chief executive of the hedge fund.
According to its most recent letter to investors, Lansdowne Partners has become more bullish on U.K. stocks as the surprise victory for the U.K.’s Conservative Party is likely to be followed by a period of strong economic activity and limited volatility. At the same time, the fund is very cautious on the future outlook of China. It’s also worth noting that the fund’s 48 long positions as of March 31 in stocks with at least a $1 billion market capitalization returned 5.8% in the second quarter of the year, while its picks have returned 7.6% year-to-date using the same criteria. It should be noted that these are not estimates of the fund’s returns, as options, bonds, and other factors are not incorporated into the data. In the following article we will be covering some of Lansdowne Partners’ best performing holdings in the second quarter, which included JPMorgan Chase & Co. (NYSE:JPM), The Goldman Sachs Group Inc. (NYSE:GS) and Amazon.com Inc. (NASDAQ:AMZN).
At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read the details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning over 139% and beating the market by more than 80 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise (while avoiding their high fees at the same time) rather than large-cap stocks.
Lansdowne Partners increased its equity holding in JPMorgan Chase & Co. (NYSE:JPM) by nearly 1.74 million shares, ending the first quarter with a stake of 20.68 million shares valued at $1.25 billion. The shares of JPMorgan Chase & Co. have grown by over 10% year-to-date and by nearly 12% in the second quarter, and it seems that the multinational banking and financial services company is on the right track, as it delivered better-than-expected financial results for the second quarter of 2015. The company reported earnings per share (EPS) of $1.54, beating estimates of $1.44 per share. The net income generated by JPMorgan Chase & Co. amounted to $6.3 billion, which marked an increase of 5% year-over-year, whereas the adjusted revenues came in at $24.53 billion, lower by 6% year-over-year. Within our database, Ken Fisher‘s Fisher Asset Management represents the second-largest shareholder of JPMorgan Chase & Co. (NYSE:JPM), with 13.58 million shares, right behind Lansdowne Partners.