Friday 25 May 2018

Biggest hedge fund's €130m 'short' on CRH

CRH boss Albert Manifold. Photo: Bloomberg
CRH boss Albert Manifold. Photo: Bloomberg
Gavin McLoughlin

Gavin McLoughlin

The world's largest hedge fund is shorting CRH to the tune of approximately €130m.

Bridgewater Associates, founded by billionaire Ray Dalio, opened the position last Monday, according to Central Bank filings.

The hedge fund is 'short' 0.5pc of CRH - a position with a market value of around €130m.

Shorting is a mechanism that allows an investor to bet that a company's share price will fall.

One mechanism is to borrow shares from a broker and sell them, pocketing the proceeds in the hope that you will be able to buy back the shares at a lower price later and return them to the broker.

It is a high-risk strategy, as the losses can be enormous if the share price rises.

At its last trading update (covering the first nine months of 2017), CRH posted 2pc growth in year-on-year revenue and 2pc in growth in year-on-year Ebitda (earnings before interest, tax, depreciation and amortisation).

It has completed the sale of its distribution business in the Americas and agreed a $3.5bn (€2.8bn) acquisition of US rival Ash Grove.

CRH boss Albert Manifold called the business an "excellent addition to CRH".

Bridgewater declined to comment on the rationale for its short position.

According to data from London-based fund of funds LCH Investments, Bridgewater has generated the most net profit of any hedge fund in history, at almost $50bn. George Soros's fund is second.

Sunday Indo Business

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