'Red Knight' Shorts Manchester United Shares
A hedge fund headed by one of the financiers who failed to buy Manchester United four years ago is betting against the club's New York-listed shares.
Sky News can exclusively reveal that Marshall Wace, one of the world's biggest hedge funds, stands to reap a profit worth millions of pounds if Manchester United continues to perform as poorly on the stock market as it is doing at its Old Trafford home.
The emergence of Marshall Wace's position in United's shares comes as the Premier League champions struggle to avoid their most ignominious season for more than two decades.
Already out of the League Cup and FA Cup competitions, they trail the Premier League leaders Arsenal by 14 points and face a tough task to progress further in the Champions' League.
Paul Marshall, one of the founders of Marshall Wace, was a member of the Red Knights consortium which in 2010 launched a campaign to persuade Manchester United's owners to sell the club.
The American Glazer family refused to engage with the Red Knights, who were led by Jim O'Neill, the former chief economist at Goldman Sachs. In August 2012, the Glazers floated the club on the New York Stock Exchange.
Since then, United have continued to enjoy reasonable success on the pitch, winning the Premier League title last season in Sir Alex Ferguson's final campaign at the helm.
His successor, David Moyes, has endured a torrid start to his Old Trafford career, however, with a series of home defeats culminating in last week's League Cup exit to Sunderland.
The size of Marshall Wace's short position in Manchester United's shares is unclear, with a spokesman for the hedge fund declining to comment on Monday.
Under US rules, hedge funds do not have to disclose the extent of their short positions in publicly-traded stocks.
However, insiders said that Marshall Wace had placed a "not immaterial" bet on a further decline in the club's shares, which have fallen nearly 14% during the last 12 months.
Mr Marshall is understood to have sanctioned the investment decision, adding a further layer of intrigue to the club's ownership.
Marshall Wace is far from the only investor expecting to make money from an ongoing fall in its share price.
Odey Asset Management, the hedge fund led by Crispin Odey, a prominent City financier, was disclosed in December as holding a short position worth approximately $5m.
Last week, it emerged that Manchester United had been relegated from the leading trio of the world's wealthiest football clubs after being usurped by Barcelona, Real Madrid and Bayern Munich.
The annual list compiled by the accountancy firm Deloitte revealed that the English club had slipped into fourth place with annual revenues of £347.7m.
That figure will slide further next year if Manchester United fail to finish in the top four of this season's Premier League.
On Monday, the club's shares were trading down roughly 1.6% at $14.78, valuing it at just under $2.5bn.
Mr Marshall is one of the City's most successful money-makers, amassing a vast fortune from the firm he set up with his business partner, Ian Wace.
A Manchester United fan, he has argued more broadly for supporter-based ownership of football clubs, criticising the Glazers in an article for The Times last year.
"In 2005, United became perhaps the most famous UK victim of the excesses that led to the global financial crisis, when they were taken over by a family of US-based real estate developers with no connection to the city.
"The Glazers could not afford the asking price but a banker from JPMorgan named Ed Woodward came up with the wheeze of 'payment in kind' notes, effectively a form of very high interest-bearing loans that enabled the Glazers to acquire the club by putting £500m of debt on to its balance sheet, turning it overnight from the wealthiest club in the country to the most debt-laden."
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