U.S. hedge fund reaps big RBS profit (short selling)

[Joanne98]

LONDON (Reuters) - A U.S. hedge fund made a profit of at least 90 million pounds betting on a fall in Royal Bank of Scotland shares over the past four months, a regulatory filing showed.

News of U.S. hedge fund Paulson & Co's profit -- which could have topped 270 million pounds if it sold all its RBS position -- emerged as four hedge funds were preparing to go before a committee of MPs on Tuesday.

A regulatory filing from Paulson & Co on Monday showed it had reduced its short position in RBS to less than 0.25 percent by last Friday.

Investors were required to disclose short positions in British banks last September, leading Paulson to declare a 0.87 percent short position in RBS. That was diluted to 0.36 percent after the government took a 70 percent stake in the bank.

Short-sellers borrow and sell shares in the hope of buying them back for less, making a profit from the price fall.

RBS shares were trading near 213 pence in mid-September, but closed on Friday at 12.1 pence, meaning Paulson would have reaped 270 million pounds if it sold all its positions, or even more if it had put on the short position much before September.

Paulson & Co was not immediately available for comment.

http://uk.reuters.com/article/topNews/idUKTRE50Q1W020090127


Paulson & Co. Inc. Appoints Alan Greenspan as Member of Advisory Board
01/15/2008
Paulson & Co. Inc. announced its retention of Dr. Alan Greenspan, former chairman of the Federal Reserve Board, as a member of its advisory board. Dr. Greenspan will provide ongoing advice to Paulson's investment management team by sharing his perspective on issues affecting the financial markets. This will be an exclusive arrangement, insofar as Dr. Greenspan will not enter into a similar consulting arrangement with any other hedge fund while he is working with Paulson & Co. Inc. Dr. Greenspan served as Chairman of the U.S. Federal Reserve Board for 18 years, from 1987 until 2006 over four presidential administrations -- those of President Ronald Reagan, President George H.W. Bush, President William Clinton and President George W. Bush.

http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=4532548