By Carolina Mandl
NEW YORK, April 13 (Reuters) - Hedge funds increased
their exposure to stocks in the financial sector amid the
banking turmoil in March, as they saw a buying opportunity at
lower prices, S&P Global Market Intelligence said in a note on
Thursday.
"Hedge funds used the bank stress as an early buying
opportunity, dismissing speculation that a significant crisis
was at play," S&P said, adding the firms boosted their exposure
to financials by 5.5%, after having reduced it by 3.9% in
February. Retail investors also increased their bets by 1%.
Hedge funds raised their exposure to financials more than
any other sector, according to S&P, which tracks assets listed
in the U.S.. Hedge funds added $13.5 billion in stocks in all
sectors in March.
Hedge funds' positioning in the banking sector came in a
month when U.S. banks Silicon Valley Bank and Signature Bank
failed, followed by Credit Suisse's rescue.
"The group saw an opportunity to pick up banking names at a
significant decline and, in order to do so, sold down holdings
in the better-performing materials and energy sectors,"
Christopher Blake, executive director of S&P Global Issuer
Solutions wrote.
Citadel, one of the world's most profitable hedge funds,
said in March in a regulatory filing it bought a 5.3% stake in
Western Alliance Bancorporation , which was seen as a
sign of confidence in the battered sector.
Traditional asset managers, another group of investors
tracked by S&P, cut their positioning in financials by 1.1% and
also slashed $20.2 billion in equities stakes across other
sectors.
Overall, the financials sector has not recovered from the
losses. The KBW Bank Index and the S&P 500 Banks Index are down
18.6% and 12.9% year to date, respectively, and both are roughly
flat in April.
(Reporting by Carolina Mandl in New York; Editing by Sonali
Paul)
