Thursday, November 13, 2008

Changes in Equity, and Derivatives Trading of GCM Resources Plc Shares

Since early October – and not unexpectedly – hedge funds (read vulture funds) have bought into GCM shares in a fashion which has markedly (if not dramatically) altered the company’s current equity ownership.

Now, by far the biggest registered shareholders are companies controlled by Christian Leone and his US hedge funds, the Luxor Capital (Management) Group. Leone himself holds 12.56% and the Luxor Group 28.63% - more than 40% of GCM’s equity. Leone is also (or was until recently) an analyst for Goldman Sachs.

Meanwhile, another hedge fund, New York-based Hound Partners LLC, has acquired 3.10% of GCM, of which around 16% are in the form of shorted CFDs (everyone should know by now what these are, since they have widely featured

As among the most “toxic” of instruments used for securitisation, and off-book dumping, of unacceptable debt). Thus, along with the holdings of L-R Capital partners (owned by Leon Levy) at 3.80%; Southpoint Capital Advisors (3.14%);

Ospraie (3.10%) and Capital Group Companies (3.07%) more than half of GCM is now in the hands of US hedge funds.

Polo Resources maintains its 29.72% interest, and Credit Suisse, UBS and Fidelity International haven’t moved.