Seeking Alpha – Here’s an excellent in-depth read from Goldman Sachs that ties directly into our tracking of hedge fund movements. And we say this because the majority of their data was taken from SEC filings and public disclosures, exactly what we track here on Market Folly. In the report, they specifically focus on hedge fund re-risking and the fact that these funds now have net long exposure near levels unseen in a long time.
Some interesting tidbits we took away from the piece are as follows:
– Hedge funds now own 3.7% of the financial sector’s market capitalization.
– Hedge funds boosted ownership in financials by 55% on a quarter over quarter basis, to $70 billion.
– They favored Bank of America as the number of funds owning it doubled (quarter over quarter). JPMorgan Chase was the second favorite. This echoes what we have been seeing in our 13F analysis. Notable fund managers like Dan Loeb (Third Point) and John Paulson (Paulson & Co) loaded up on shares of BAC, among many other prominent managers. It really is almost astounding how many big names piled into this play over the last quarter.
