Michael Perry, who was famous for shorting subprime mortgages before the 2008 financial crisis, closed the majority of his regional banking dealings in the second quarter, filings With the SEC revealed on Monday.
Burry Scion Asset Management’s hedge fund divested stakes in Western Alliance (WAL), Huntington Bank (HBAN), PacWest (PACW) and First Republic (FRCB) during the second quarter.
First Republic was acquired by the Federal Deposit Insurance Corporation and sold to JPMorgan & Chase at the beginning of May. PacWest agreed to merge with rival Bank of California (BANC) in late July in a deal set to close next year.
In the first quarter, Perry spent more than $23 million betting on financial stocks during a quarter in which Silicon Valley Bank (SVB), Signature Bank, and Silvergate were all hit in a matter of days.
Scion also closed positions in Capital One (COF) and Wells Fargo (WFC), both of which opened during the first quarter of this year.
Scion also reduced 76% of its holdings in New York Community Bancorp (NYCB), the regional lender that acquired $38.4 billion in assets owned by Signature Bank from the FDIC in a $2.7 billion deal.
During the second quarter, the S&P S&P Regional Banking Index (KRE) fell about 7%, trailing the broader financial sector (XLF) and the S&P 500, which gained 5.4% and 8.4%, respectively, over the same period. .
Shares of Western Alliance rose about 5.5% during the second quarter, while Huntington’s stock fell by about 2% and Backoist fell 13%, a move that came before the company’s merger was announced.
During the second quarter, Scion also sold off its sites to Chinese e-commerce and technology companies Alibaba (BABA) and JD.com (JD).
Scion did not immediately respond to requests for comment on the investments.
Perry gained notoriety for his moves during the 2008 crisis, predicting and then profiting from the collapse of residential property prices early in 2007. He was portrayed as a central character in Michael Lewis’ 2010 book “The Big Short”. Christian Bale later portrayed him in the movie Adapted 2015 from Lewis’s book.
Other notable investors including major hedge fund Bridgewater Associates, the world’s largest firm, and quantitative trading pioneer Renaissance Technologies adjusted their bank exposure in the second quarter.
Bridgewater sold its remaining positions in regional banks US Bancorp (USB), M&T Bank (MTB) and First Horizon Bank (FHN) after shedding another 15 positions in US lenders in the first quarter. However, it raised its holdings in Citigroup (C) and Jefferies investment bank (JEF) while also opening a small position in Capital One and doubling its stake in Bank of New York Mellon (BK), according to filings from friday.
Renaissance Technologies was a net buyer of banks in the second quarter, according to it filing. The company opened a large position at Bank of America (BAC) as well as a smaller position in San Antonio, Texas regional lender Colin Frost (CFR) while reducing its exposure to Bank of New York Mellon and Deutsche Bank AG (DB).
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