City Diary: the fund managers that bailed out (and got stung) on Northern Rock shares

Those clever Scots at Baillie Gifford knew. The Charlotte Square fund manager was the first investor in Northern Rock to start bailing out in high summer, before the worst effects of the credit crunch were starting to show.

Baillie Gifford sold a holding of 1% in the Rock for £36 million in June for around 900p a share and offloaded much of the rest of its holding in the middle of September, at 290p.

The traditional investment strategies of Baillie Gifford are unlikely to have made money on these fire sales of Rock stock but the Scots are sitting a lot prettier than the hedge funds who picked up the shares at what now look like inflated prices, only to see them crater further.

• On this subject, the Evening Standard's City Spy hears that Northern Rock’s advisers are fed up at having to put up with Jon Wood, whose SRM hedge fund is now the bank’s second-biggest shareholder. What’s especially galling for them is that this is the former UBS banker who was once branded 'unreliable' and 'not always honest in everything he says' by a High Court judge.

This was when Wood lost the £100m lawsuit he brought against Sir Tom Hunter and Chris Gorman, fellow shareholders in the failed Gadget Shop. Mr Justice Warren said Wood 'came across as a very hard and calculating man, albeit attempting to present himself in a much softer way. Where his evidence differs from those of other witnesses, I prefer theirs'. At Northern Rock, as Wood attempts to throw his weight around, lips are being bitten very hard indeed.

• A beast of an investment. When at the end of September, the other main Northern Rock hedge fund investor, RAB Capital, topped up its holding in the bank with the acquisition of another 2.5 million shares, its stake in the lender rose to 6.66%.

- Evening Standard's City Spy

- Everything you need to know about Northern Rock