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George Soros hedge fund makes £16m bet against Daily Mail owner shares

Jasper Jolly

The hedge fund owned by the billionaire investor and anti-Brexit donor George Soros has made a £16m bet against shares in the owner of the Daily Mail newspaper.

SFM UK Management, the London arm of the New York-based Soros Fund Management, this week took out a short position representing 0.9% of the shares of Daily Mail and General Trust (DMGT), according to filings to the Financial Conduct Authority published on Thursday.

DMGT, which also owns the Metro newspaper, bought the i newspaper and website at the end of November for £46.9m. However, its crown jewel is the Mail titles, including the Mail on Sunday, Daily Mail and Mail Online, which have been intensely critical of Soros because of his donations to liberal causes.

Soros has become a hate figure among some sections of the political right wing in Europe and the US. His vilification has included outright conspiracy theories from figures including the Brexit party leader, Nigel Farage, and the Hungarian leader, Viktor Orbán. Orbán has sought to portray Soros as an enemy of the country in which he was born and shut down a university partly funded by the investor.

In February 2018 the Daily Mail published a front-page story headlined “Fury over billionaire’s plot to sabotage Brexit” featuring a picture of Soros, 89. The story was based on Soros’s donations to the Best for Britain group, which is campaigning for the UK to remain in the EU, and followed a front-page Daily Telegraph story that led to accusations of the use of antisemitic tropes.

In June 2017 a Mail story ran an article reporting criticism of Soros as a “puppetmaster” who “successfully manufactured Europe’s migration crisis”. The same article said Soros was “public enemy number one of nationalists around the globe”.

Paul Dacre, the editor under whom many anti-Soros articles were run, remains as the chairman and editor-in-chief of Associated Newspapers, the DMGT subsidiary that controls the Mail titles, although the title is not widely regarded as an active editorial role.

DMGT has been trying to simplify its business with numerous asset sales in recent years, including the sale of an energy-data business for £300m in August, but analysts have raised concerns about its growing exposure to the consumer advertising market through its stable of newspapers and lack of growth prospects. However, the continuing profitability of the Mail titles has helped to cushion the blow of declining print advertising revenues. Nonetheless, DMGT’s share price has risen by about 45% this year, to 831p.

It is the first time that Soros’s fund has bet against DMGT or any other consumer publisher in the EU since investors were first forced to report short positions in 2012, according to Breakout Point, a short-tracking data service, which first reported the bet. However, the majority of the short positions that it must report are in the UK, Breakout Point said.

Short sellers borrow shares from their owners and then sell them on, in the expectation that the price will fall. They then make a profit, having pocketed the proceeds from that sale, if they are able to buy the shares back at a cheaper price when they return them to their original owner.

SFM is not the only hedge fund betting against DMGT: CZ Capital holds a 0.7% short, while GLG Partners has a 1.3% short.

DMGT declined to comment. SFM has been approached for comment.