Mendon Capital Advisors is a New York based hedge fund managed by Anton Schutz, who founded it in 1996. The fund employs a long/short equity strategy with an event-driven slant, and focuses solely on the financial sector. Mendon Capital tends to invest in small-cap companies that are likely to become the target of M&A activity. Since inception, the fund has returned 14.2% per year. Its equity portfolio is currently valued north of $300 million, with its top 10 holdings accounting for more than 35% of the total portfolio’s value. In this article I will look into the fund’s largest bets and how they changed over Q1 2014.
Mr. Schutz’s top 3 positions remained the same, although the second and third-runner-up traded spots. The third place is now occupied by 1st United Bancorp Inc (Florida) (NASDAQ:FUBC), a $281 million market cap financial holding company that wholly owns 1st United Bank, a Florida state chartered bank. In his last Form 13F filing, Schutz declared owning 1.42 million shares of the company, up 2% in relation to Q4 2013. His holdings are worth $11.5 million, and account for approximately 3.5% of his total portfolio’s value. Robert I. Usdan and Wayne K. Goldstein‘s Endicott Management, last declared holding 2.98 million shares of 1st United, valued at more than $23 million.
1st United Bancorp was displaced from the second place that it held at the end of the fourth quarter of 2013 by Yadkin Financial Corp (NASDAQ:YDKN), a $251 million market cap bank holding company of Yadkin Bank. Its operations are mainly retail oriented and directed toward individuals and small and medium-sized businesses. Over the first fiscal quarter, Mendon Capital raised its bets by 19%, and now owns 705,042 shares of the company, worth almost $13 million.
Other major hedge fund betting on Yadkin Financial are Jim Simons’ Renaissance Technologies, which almost doubled its position in the stock during the first quarter, and now owns 184,115 shares, and Neil Chriss’ Hutchin Hill Capital, with 248,333 shares.
The first position in this list, however, remained unchanged in relation to Q4 2013. The fund’s most valuable wage is placed on Investors Bancorp, Inc. (NASDAQ:ISBC), a $3.7 billion market cap holding company for Investors Bank, a chartered savings bank. The fund disclosed ownership of 724,000 shares of different classes, which, in total, are valued at roughly $15 million (about 5% of its portfolio’s total value). Once again, Jim Simons’ Renaissance Technologies can be counted amongst the company’s hedge fund bulls. Its 1.225 million shares (more than $30 million in stock) make it the largest hedge fund shareholder at Investors Bancorp.
Some other of Mendon Capital Advisors’ stock positions also deserve further analysis. Amongst them we can count Cowen Group Inc (NASDAQ:COWN) and ConnectOne Bancorp Inc (NASDAQ:CNOB), two small-cap companies that saw the fund increase its stakes over Q1. Mendon Capital now owns about $10 million in each of these companies’ stock.
Disclosure: Javier Hasse holds no position in any stocks mentioned.