The banking crisis wreaked havoc in the industry in recent months, and hedge funds have been picking winners and losers among financial stocks, according to Goldman Sachs. The Wall Street bank analyzed the holdings of 740 hedge funds with $2.2 trillion of gross equity positions at the start of 2023, based on regulatory filings. Goldman then identified financial and real estate stocks with the largest recent changes in ownership among hedge funds. Real estate stocks, especially those in the commercial sector, have also been under pressure as the banking shocks amplified the risk of higher interest rates that could complicate the debt roll. A total of 47 hedge funds added BlackRock , the world’s largest asset manager, to their holdings in the first quarter. Meanwhile, Focus Financial Partners, a wealth management firm, also attracted a slew of hedge fund interest. A number of hedge funds also bought the dip in Charles Schwab last quarter. The stock is down more than 36% this year, taking its hits along with other financial firms with massive bond holdings of longer maturities. Investors feared the company could suffer a similar fate as Silicon Valley Bank and First Republic. Hedge funds also increased their allocation to Fidelity National Info , SLM Corp . and Everest Re . As for financial and real estate stocks that hedge funds sold the most in the first quarter, Welltower topped the list with 26 funds dumping the name. Welltower, a real estate investment trust that invests in health-care infrastructure, is still up 16% this year, so it could be a sign that some of the hedge funds took profits. A number of hedge funds also decreased their exposure to Visa and CME Group . U.S. Bancorp also saw reduced interest from investors. Notably, Warren Buffett ‘s Berkshire Hathaway dumped its stake in U.S. Bancorp in the first quarter as the “Oracle of Omaha” warned of more bank failures to come. East West Bancorp , Aon , First Interstate BancSystem and Discover Financial Services were other names that hedge funds hated last quarter amid the banking chaos.
