Shorting the client
It’s not just smaller hedge fund managers that do it
By nature of its enormous size, BlackRock always has something going on somewhere, and when you check the FCA’s list of disclosed short positions in UK-listed companies it is always in there (I assume the same goes for other markets).
Currently it has 12 short positions in PLCs, out of almost 270 currently on the FCA list of those that are above the public reporting threshold of 0.5%. I think it has the 4th most publicly disclosed short positions (after GLG, Marshall Wace and… er… JP Morgan Asset Management (UK) Ltd). BlackRock’s current disclosed positions are listed below.
abrdn plc
ALPHAWAVE IP GROUP PLC
B&M EUROPEAN VALUE RETAIL S.A.
Brown(N.)Group
BT GROUP PLC
BYTES TECHNOLOGY GROUP PLC
J. Sainsbury PLC
JOHNSON MATTHEY PLC
NINETY ONE PLC
OCADO GROUP PLC
PENNON GROUP PLC
PETS AT HOME GROUP PLC
At least one of these is a company which sponsors a pension fund where BlackRock manages money.
Johnson Matthey Employees Pension Fund lists BlackRock as a manager in both its DB and DC sections in its 2023 annual report, with about £230m under management by BlackRock Investment Management UK Ltd on the DB side as at 31 March 2023.
Meanwhile the FCA lists BlackRock Investment Management (UK) Limited as having a 1.35% short position in Johnson Matthey PLC currently.
It has had this position for over five years and the table below, utilising FCA data, shows how it has changed during over the last five years.
From what I can glean elsewhere, BlackRock holds short positions in Johnson Matthey PLC in at least a couple of absolute return funds, utilising CFDs. One example I found is below.
For completeness, Johnson Matthey PLC’s annual report lists BlackRock, Inc as one of its largest shareholders with a 5.56% long position, though this is listed as being ‘indirect’, which, according to the note to the disclosure, includes “qualifying financial instruments and contract for differences”.
So I guess that means that BlackRock is net long around 4%.
Over the past five years the Johnson Matthey Plc share price is down over 40%, which perhaps validates the short.
Since it has both long and short positions, the nature of the manager’s economic interest in the company, and any stewardship focus that flows from this, is not immediately obvious. BlackRock’s voting record shows that it has voted for every resolution proposed by management at the company’s annual meetings from 2019 to 2023, which is all the data currently available.
PS. To be precise, the short position is, of course, in the sponsoring employer rather than the pension fund, which is a legally separate entity.