Notable investors from David Einhorn to Michael Burry appeared to take advantage of the banking turmoil last quarter, picking up shares in the sector for either a short-term trade or a conviction bet that the industry would weather the storm. Einhorn’s Greenlight Capital took small stakes in New York Community Bancorp and First Citizens Bancshares in the first quarter, with each bet worth about $20 million, according to a regulatory filing. His buys are both tied to banks that purchased parts of failed institutions in deals that were orchestrated by the Federal Deposit Insurance Corporation. New York Community Bancorp’s subsidiary, Flagstar, acquired Signature Bank assets after that bank was shuttered , while First Citizens bought a large portion of Silicon Valley Bank assets . New York Community shares are up nearly 20% this year, while First Citizens’ stock has jumped more than 68% on the year. Philippe Laffont’s Coatue Management also picked up First Citizens BancShares last quarter. Meanwhile, D1 Capital took a small stake in PNC, which has fallen nearly 30% this year. To be sure, the recent regulatory filings reflects their holdings at the end of March, so they could have already adjusted or sold their stakes between the filing date and now. It’s also possible that these hedge funds were buying shares to cover their short positions in banks. ‘Big Short’ Burry of “Big Short” fame snapped up a slew of regional banks last quarter, including New York Community Bancorp , Capital One Financial , Western Alliance , PacWest Bancorp and Huntington Bancshares during the first quarter. Western Alliance and PacWest Bancorp have been struggling amid concerns about deposit outflows. The impact of higher interest rates led to a run on deposits at Silicon Valley Bank, Signature Bank and First Republic, which were all seized by regulators in the span of a few weeks. PacWest shares tanked 51% in May after deposit outflows and news that the lender was exploring strategic options. Still, Burry recently expressed optimism for the banking industry, saying he expected the banking crisis to be over soon without severe damage. “This crisis could resolve very quickly. I am not seeing true danger here,” Burry said in a now-deleted tweet in March. ‘Oracle of Omaha’ One surprising move in the industry came from Warren Buffett’s Berkshire Hathaway , which built a new stake in Capital One Financial in the first quarter, worth more than $950 million. The Virginia-based financial institution fared relatively well during the recent banking chaos with shares rising more than 3% in the first quarter. It’s unclear if it was Buffett who purchased the stock or one of his investing lieutenants, Todd Combs and Ted Weschler, was behind the move. To make matters more confusing, the conglomerate dumped its remaining stakes in Bank of New York Mellon and U.S. Bancorp . The “Oracle of Omaha” recently struck a pessimistic tone about the health of banks, saying American banks could face more turbulence ahead. — CNBC’s Alex Harring contributed reporting.
