Hedge Funds Mortgage Lenders

Some Hedge Funds Favoring Mortgage Lenders

Some large hedge funds are favoring mortgage lenders, most noticeably PMI Group Inc. (PMI). Among the hedge funds to start buying up shares of PMI is the hedge fund giant Paulson & Co. Shares in many mortgage lenders logically sunk during the sub-prime mortgage crisis but these trades suggest a new investor confidence in the lenders ability to rebound.

Some big hedge funds have taken a liking to mortgage insurers in recent months, especially PMI Group Inc. (PMI), whose stock-market value has plunged in recent years.

Paulson & Co., one of the world's largest hedge-fund firms, said in a regulatory filing late Monday that it held 5 million PMI shares at the end of June. The firm held no PMI stock at the end of March.

Blue Ridge Capital, run by former Tiger Management trader John Griffin, disclosed a new 8 million-share stake in PMI as of the end of June, according to a recent filing.

Omega Advisors, run by Leon Cooperman, almost doubled its stake in PMI to 7.93 million shares during the second quarter, another recent regulatory filing showed.

PMI shares jumped 15% to close at $3 Tuesday. The stock is up almost 19% so far this year. Source

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