9:42PM BST 30 Jul 2011 The disposal – equivalent to just under 1pc of Goldman's equity – mirrors a similar sale Lansdowne made in 2008, ahead of the financial crisis. The recent sale of 4.94m Goldman shares, revealed by The Telegraphfor the first time, will come as a further blow to the investment bank, which recently saw its shares hit levels not seen since spring 2009 after disappointing second-quarter results. It marks a sizeable bet against the investment bank by the hedge fund, which sat on the top 20 list of Goldman investors, given the stake equated to almost 10pc of the $10bn funds Lansdowne has under management. The move is expected to send a stark message to Goldman, led by chief executive Lloyd Blankfein, and other investment banks about the strength of concerns among investors. It also echoes concerns voiced in the UK, most notably by Schroders' UK equities chief Richard Buxton, who in June met Treasury officials to warn of the danger of regulatory overload on British banks. Part of Lansdowne's decision-making process is understood to have focused on the reduction in the value of Goldman's proprietary trading operations as a result of regulatory changes in the US. Under the so-called Volcker rules – named after former US Treasury secretary Paul Volcker – enshrined within the recent Dodd-Frank legislation, Goldman has seen its lucrative proprietary investing curtailed. It has also suffered as a result of industry reductions in the use of leverage, or gearing, following the financial crisis, which was one of the ways it used to make money when trading from its own book. In addition, Goldman, like other banks, is also making the transition towards much more onerous global capital requirements under the new Basel III requirements. As a result of these changes, Goldman's return on equity has reduced from a traditional 24pc to 30pc range to approximately 15pc. Earlier this month, the bank saw its shares hit a two-year low of $125.50, having fallen 19.2pc this year, on the back of news that it missed profit expectations for only the fifth time since going public more than a decade ago. Profits in the second quarter of the year fell to $1.09bn, from $2.7bn in the first three months of the year, as its behemoth Fixed Income, Currency and Commodity division saw revenues tumble by 64pc from the first quarter. The last time Landsdowne sold its Goldman Sachs holding was in the months leading up to the Lehman Brothers collapse in 2008. That sell-off marked the beginning of a crisis of confidence in the financial sector which culminated in Lehman Brothers' demise and a global economic meltdown. Unlike 2008, however, Lansdowne has not sold out of the banking sector altogether, having instead taken flight from investment banks and moved more capital to the retail banking sector. After the Government, which owns a 41pc stake, Lansdowne is believed to be the third or fourth biggest shareholder in Lloyds Banking Group, despite the looming problems which may flow from the Independent Commission on Banking's final report, due to be published on September 12. This month, Landowne's flagship $10bn UK fund, run by Stuart Roden and Peter Davies, will celebrate its 10th anniversary. In the past decade, the fund has made compound returns of 15pc. However, this year Rodan and Davies are said to be feeling the pinch, with the fund trading down as much as 13pc, for the year so far. 9:39PM BST 30 Jul 2011 Philip Monks, the former Barclays banker who is now chief executive of start-up small business and residential mortgage lender Aldermore, has made the claim in an interview with The Telegraph. He said: “Banks are turning around to very bankable customers and saying: 'Would you mind leaving us so we can free up space to take on business from new customers so we can prove we’re lending to new businesses?’ There’s a churn going on in the marketplace.” In addition, he claims to have anecdotal evidence of SME owners who asked their bank relationship managers for loans to expand only to be met by a “sucking of teeth”. “No formal application has been made but no SME business person has time to waste in producing a detailed business case for a bank if the relationship manager is saying, 'Sorry, it’s not going to get through’ – so it doesn’t hit their statistics,” he added. “There’s a complete lack of confidence in banks’ willingness to lend and that’s probably depressing demand in its own right. “We have a number of customers who have come to us and said: 'We’ve been asked to leave because we’re a bankable proposition’. They have very good credit and we’re very happy to take them on.” Mr Monks’ claim comes as Bank of England figures show that lending to UK SMEs is dropping by £12m a day and has fallen by £34bn since before the credit crunch, when it stood at £82bn to £85bn. Bank governor Mervyn King said last year that it was “heartbreaking to see so many businesses going under because lenders refused to supply them with the essential funds they need to function”, but Mr Monks said this was a carry over from the financial crisis. He said banks had been left with too many long-dated assets which it was impossible for them to shift from their books without taking a loss.Lansdowne Partners sells entire $850m stake in Goldman Sachs
Lansdowne Partners, Europe's biggest hedge fund, has sold its entire $850m (£517m) position in
Goldman Sachs in a move that underlines growing concerns about the prospects for the global
banking sector.
Banks 'asking customers to leave' to hit Government targets
High street banks are being accused of asking perfectly sound small businesses to leave them
so they can free up capital to take on new customers to meet the Government's small business banking targets.
Sunday, 31 July 2011
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