Failed Manchester United buyer shorts shares

Hedge fund owner and Man U fan bets the team's shares will perform as badly as its footballers.

by Rachel Savage
Last Updated: 18 Nov 2014

A hedge fund headed up by one of the ‘Red Knights’ that failed to buy Manchester United four years ago is betting that the club’s shares will perform as badly as its team has on the pitch this season.

Marshall Wace, whose founder is Man U fan Paul Marshall, will net millions of pounds if the Premier League champions’ share price keeps falling, according to Sky News’ Mark Kleinman. The New York-listed shares have fallen more than 10% in the last 12 months.

The bet comes as Manchester United suffers what could be its worst season for two decades under new manager David Moyes. The Red Devils have been knocked out of the FA Cup and League Cup, trail Premier League leaders Arsenal by 14 points and are still below the qualification places for next year’s Champions’ League.

Manchester United were also relegated from the top three richest clubs for the first time in 17 years last week, trailing Barcelona, Real Madrid and Bayern Munich in Deloitte’s Football Money League with annual revenues of £347.7m.

Marshall, who founded Marshall Wace with his business partner Ian Wace, was part of the Red Knights consortium led by ex-Goldman Sachs chief economist Jim O’Neill that tried to persuade the American Glazer family to sell Manchester United.

The Glazers rebuffed the Red Knights’ advances and floated the club on the New York Stock Exchange in August 2012.

The size of Marshall Wace’s bet isn’t clear, as US rules mean hedge funds don’t have to disclose their positions in publicly traded companies. However, ‘insiders’ told Sky News that it was ‘not immaterial’.

Marshall, who is the father of Mumford & Sons’ guitarist Winston Marshall, is reported to have given the hedge fund’s bet the go ahead. Perhaps he’s hoping the Glazers will turn round and say, ‘It was not your fault but mine…’

Hedge fund Odey Asset Management also has a short position in Man U, revealed to be about $5m (£3m) in December.

Manchester United’s shares were down 1.6% to $14.78 at the end of trading on Monday, valuing the club at over $2.4bn. Even $2.4bn can't stop Robin Van Persie sitting injured on the sidelines…

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Finance

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