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Andrew Redleaf’s Whitebox Advisors Acquires More Shares of Ocwen Financial Corp. (OCN)

According to a Schedule 13G filing with the SEC, Andrew Redleaf’s Whitebox Advisors disclosed raising its stake in Ocwen Financial Corp. (NYSE:OCN) to 7.67 million shares, equal to 6.12% of the company’s outstanding stock. This yields an increase of 2.28 million shares in the fund’s position size since it revealed its most recent 13F filing with the U.S. Securities and Exchange Commission for the second quarter.

Andy Redleaf Andrew Redleaf Whitebox Advisors

Andy Redleaf of Whitebox Advisors

Whitebox Advisors is an employee-owned hedge fund established by Andrew Redleaf in 2000. The investment firm employs a mix of quantitative and qualitative analysis to make its investments and manage its portfolios. Andrew Redleaf is an exceptionally smart lad, as he managed to earn “magna cum laude” Bachelor and Master’s degrees in mathematics at Yale University in just three years. Furthermore, he was honored with the mathematics prize as the top undergraduate in the field. Andrew Redleaf started his investment career as a trader for Gruntal Securities, where he used his math skills to his advantage. Then, he had also worked as a market maker on the Chicago Board Options Exchange and as a portfolio manager at Deephaven Market Neutral Fund prior to launching his own firm. According to its most recent 13F filing, Whitebox Advisors manages a diversified equity portfolio with a value of $2.31 billion as of June 30, of which the largest portion of roughly 26% is held in financial stocks.

Andy Redleaf
Andy Redleaf
Whitebox Advisors

In the eyes of most traders, hedge funds are assumed to be underperforming, old investment tools of the past. While there are more than 8,000 funds in operation, hedge fund experts at Insider Monkey look at the aristocrats of this group, represented by around 700 investors. Our research revealed that hedge funds underperformed in recent years because of their short positions as well as the huge fees that they charge. Hedge funds managed to beat the market on the long side of their portfolios. In fact, the 15 most popular small-cap stocks among hedge funds returned 123% since the end of August 2012 and beat the S&P 500 Index by almost 66 percentage points (see more details here).

Ocwen Financial Corp. (NYSE:OCN) is a financial services holding company that engages in the servicing and origination of mortgage loans. The company provides solutions that assist homeowners in making their loans worth more by using its proprietary technology, global infrastructure and superior training and processes. The shares of Ocwen plunged by over 46% since the beginning of the current year, partly owing to a weak financial performance.

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