Hedge Funds Dump JPMorgan, Buy Up Other Banks

Aug 16 2012 | 11:39am ET

Hedge funds fled from JPMorgan Chase shares in the second quarter, dumping the stock in the wake of a damaging trading scandal that has cost the bank billions. But the turn against JPMorgan came amidst something of a buying spree for hedge funds among other financials.

The JPMorgan sell-off was led by Moore Capital Management, which dumped all of its 6.47 million shares of the bank. TPG-Axon Management also quit the stock.

Other hedge funds seriously trimmed their stakes, including Highfields Capital Management, Omega Advisors, Owl Creek Asset Management and Soros Fund Management. And Paulson & Co. cut back on its JPMorgan warrants on the quarter.

Meanwhile, other hedge funds were buying up other bank shares. BlueMountain Capital Management opened a new position in Citigroup and boosted its stake Flagstar Bancorp. Kynikos Associates boosted its holdings of Citi, and Eton Park Capital Management said it has the right to buy up 21.5 million Morgan Stanley shares and 12.7 million Citi shares.

In addition, Baupost Group and Greenlight Capital opened positions in insurer Genworth Financials.

Some hedge funds even sought to take advantage of the huge drop in JPMorgan shares, despite the months of uncertainty ahead. BlueMountain, Kynikos and Odey boosted their stakes in the bank, as did Capital Growth Management.

Nor was every other bank the apple of every hedge funds' eye. Moore ditched positions in U.S. Bancorp and Wells Fargo. Pershing Square Capital Management and Viking Global Advisors abandon or cut stakes in Citi, while Appaloosa Management and Omega sold off Bank of America.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.