Crispin Odey, the hedge fund manager who has begun taking long positions in UK banks having reaped handsome profits betting on their decline last year, has revealed a large short position in insurer Legal & General as he seeks returns on falls elsewhere in the financial sector.

Shares in L&G have fallen 42% so far this year as concern grows on the insurance market's ability to equip itself financially without having to raise money through rights issues, which would dilute the holdings of existing shareholders.