BBC News- The upmarket district in the West End of London is home to many of the financial speculators who have made a mint out of the mortgage bank’s woes.
Hedge funds – as well as traders in some of the big City investment banks – have been betting heavily for months that Northern Rock was facing serious funding problems and its shares were on their way south.
Their concerns proved well founded.
The collapse in Northern Rock’s share-price has been spectacular since the BBC revealed that the Newcastle-based lender had applied to the Bank of England for emergency funding.
At 195p by Friday afternoon, they were changing hands for less than a third of the price that they were a little over a week ago, and well below the £12.58 they fetched in February.
Hedge funds deploy a wider range of investment strategies across a broader range of markets – from currencies to commodities to shares – than traditional long-only fund managers in the pursuit of generous returns, even in declining market.
