Hedge funds have been quietly building up stakes in the fledgling oil explorers operating off the Falklands, betting that companies will ignore the threats made by Argentina to disrupt the acti- vity.
Lansdowne Partners, one of Europe’s most powerful hedge funds, Crispin Odey’s Odey Asset Management and Blackfish Capital, owned by the Rowland family, have all acquired stakes, regulatory filings show, as investors grow more excited over drilling prospects and a clear plan for the first oil field development.
One of the longer-time backers of the sector has been the RAB Special Situations fund, which owns more than 10 per cent of Falkland Oil & Gas and which has 28 per cent of its portfolio invested in the company.
More recently Lansdowne Partners has gradually built up a 13 per cent stake in Borders & Southern, making it the largest shareholder in the firm.
Meanwhile Odey raised its stake in Rockhopper Exploration, the most successful local explorer to date, to just over 7 per cent in August, while in July Blackfish Capital, a subsidiary of Banque Havilland, bought a 20.13 per cent stake in Falkland Islands Holdings, making it the biggest shareholder by some distance.
Falkland Islands Holdings, in which Mercury Asset Management’s founding director and private investor Leonard Licht owns a 5.9 per cent stake, according to Thomson Reuters data, has a 4 per cent holding in Falkland Oil and Gas.
None of the hedge funds responded to requests for comment.