Volatile banking sector saw big moves from funds in first quarter (updated)

First Republic Bank

15/05/2023 23:06

(Adds details on hedge funds in paragraphs 5, 10-12)
    By David Randall and Carolina Mandl
       NEW YORK, May 15 (Reuters) - Fund managers zeroed in on
the U.S. financial sector during the first quarter, a period
marked by the worst banking crisis since 2008.
    The S&P Regional Banking Index fell approximately 25% during
the quarter as a run on deposits sank Silicon Valley Bank and
Signature Bank in March, both of which were at the time the
largest banking failures since the Great Financial Crisis. The
S&P Regional Banking index is now down 36% for the year to date.
    Billionaire investor Jim Simons' Renaissance Technologies
LLC, which has more than $100 billion in assets under
management, bought approximately 7.1 million shares of embattled
First Republic Bank  FRCB.PK  during the quarter and still held
them as of March 31, when they closed at $13.99 per share,
according to securities filings released Monday. The firm
collapsed on May 1 in what was the largest bank failure since
2008. 
    The securities fillings did not show whether the firm sold
any of its position before the firm's May 1 seizure by
regulators. 
    Famed "Big Short" investor Michael Burry's Scion Asset
Management, meanwhile, added a number of new positions in
regional banks, including stakes in First Republic, PacWest
 PACW.O  and Western Alliance Bancorp  WAL.N . 
    Boston-based Adage Capital Partners added a new position of
approximately 185,000 shares of First Republic during the
quarter, while New York-based Alpine Global Management LP added
a new position of approximately 1.7 million shares, filings
showed.
    Renaissance Technologies, Adage Capital, Alpine Global, and
Scion did not respond to requests to comment.
    The positions were revealed in quarterly securities fillings
known as 13-fs. While backward looking, these snapshots show
what funds owned on the last day of the quarter and are one of
the few ways that hedge funds and other institutional investors
have to declare their positions. They may not reflect current
holdings.
    Among prominent sellers of First Republic’s stock was Ray
Dalio's Bridgewater Associates, one of the world's largest hedge
funds, which closed its position amid a broad portfolio shift
away from financial firms. 
    The fund liquidated its positions in big U.S. banks
including Bank of America Corp  BAC.N , Goldman Sachs Group Inc
 GS.N , and Morgan Stanley  MS.N , and slashed its positions in
smaller banks such as Bank of Hawaii Corp  BOH.N , PacWest, PNC
Financial Services Group  PNC.N , Citizens Financial Group
 CFG.N  and Capital One Financial Corp  COF.N .   
    London-based Marshall Wace sold 51,300 shares of First
Republic in the first quarter, closing its position in the bank.
    Berkshire Hathaway  BRKa.N , the conglomerate run by
billionaire Warren Buffett, added a new position in Capital One
Financial while dissolving its positions in US Bancorp and Bank
of New York Mellon Corp  BK.N , filings showed.

 (Reporting by David Randall; Editing by Ira Iosebashvili,
Marguerita Choy and Lisa Shumaker)
 ((David.Randall@thomsonreuters.com; 646-223-6607; Reuters
Messaging: david.randall.thomsonreuters.com@reuters.net))