Independent – Lansdowne Partners, the hedge fund, has made almost £13m from a short position in Aviva – and stands to make more if the beleaguered insurer announces a rights issue.

The London-based investor has had a net short position on 0.27 per cent of Aviva shares since 13 February. The stock has since tumbled to less than half its value and on Friday a trade could have netted the fund £12.7m.

Hedge funds which made a killing last year short-selling banks ahead of rights issues are turning their attention to the insurance sector.

Lansdowne last month made a possible profit of almost £2.7m from short positions in Old Mutual and Legal & General, and has continued with trades in Aviva and Prudential. Lansdowne is not alone. Rivals including Odey Asset Management, Diamondback Capital and Gilder Gagnon Howe have also been playing the game.

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