Hedgies bet against Petrofac before probe

Hedge funds raised their bets against Petrofac the day before the oil services group revealed it was involved in a fraud probe which caused its shares to tank.

London-based Marshall Wace and US outfit AQR Capital increased their short positions in Petrofac in the hope of profiting from a share price fall.

The following day Petrofac told investors it was under investigation by the Serious Fraud Office, apparently in relation to the investigation into Unaoil, a Monaco-based consultancy whose services it used in Kazakhstan. The news triggered a 14% dive in the FTSE 250 firm’s share price.

AQR Capital raised its short position to 1.71% last Thursday, according to FCA filings.

On the same day, Marshall Wace nudged its short position higher to 0.51%, the first change in its position in a year. They will have made several millions of pounds from the trades. Petrofac and Marshall Wace declined to comment, AQR did not respond to requests for comment.