EJF Capital Finds A New REIT To Sink Its Money Into, Should Your Money Follow?

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EJF Capital, led by Emanuel J. Friedman, has increased its stake in Wheeler Real Estate Investment Trust Inc (NASDAQ:WHLR) according to a new filing made with the U.S. Securities and Exchange Commission. EJF Capital disclosed holding 3.35 million shares of the company, representing a massive increase from the mere 18,111 shares the fund reported in its most recent 13F filing. The stake is passive by nature, and equates to 6.2% of the company’s outstanding common stock. Wheeler Real Estate Investment Trust Inc (NASDAQ:WHLR) is a fully-integrated, self-managed commercial real estate investment firm, with a market cap of $17.47 million.

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Washington-based EJF Capital was founded in 2005. The fund employs an event-driven approach to identify opportunities across the entire capital structure of companies. EJF Capital mainly focuses on the banking and finance sectors and has about $5 billion in assets under management. Recently, EJF Capital filed its latest 13F with the SEC, disclosing a public equity portfolio valued at $2.91 billion. In this article, we’ll also discuss EJF Capital’s positions in Ally Financial Inc (NYSE:ALLY), Colony Capital Inc (NYSE:CLNY), and American Capital Ltd. (NASDAQ:ACAS).

First, back to Wheeler Real Estate Investment Trust Inc (NASDAQ:WHLR), which is engaged in acquiring and managing retail properties, with a primary focus on grocery-anchored centers. For the first quarter of 2015, the company reported a net loss of $6.3 million, versus a loss of $1.2 million in the same quarter last year. However, revenue for the quarter increased by 57.0% to $5.8 million year-over-year. On Monday, the company announced that it commenced an exchange offer to holders of its series A and B preferred stock. The exchange offer will permit tendering shareholders to exchange their shares of series A preferred stock or series B preferred stock for an aggregate of up to 20.85 million shares of newly-issued shares of the company’s common stock, $0.01 par value per share. Each series A preferred stock share is exchangeable for 500 shares of common stock, and each series B preferred stock share is exchangeable for 12.5 shares of common stock. The exchange offer will expire at 11:59 p.m., New York City time, on July 13. Shares of Wheeler Real Estate Investment Trust Inc (NASDAQ:WHLR) have risen by 56.06% during the past year. Among the investors we track is Jim Simons’ Renaissance Technologies, which holds 27,954 shares as of the end of the first quarter.

Let’s take a look at EJF Capital’s other positions, beginning with Ally Financial Inc (NYSE:ALLY). During the first quarter, EJF Capital increased its position in the company by 14% to 18.88 million shares, valued at $396.2 million. The $11.0-billion automotive financial services provider has been EJF Capital’s top holding, in terms of value, for the last four quarters. The company’s financial position looks strong, with its first-quarter net income jumping to $576 million, versus a net income of $227 million in the same quarter last year. In addition, retail deposits at Ally Bank improved to $50.6 billion as of March 31, up 12% year-over-year. Another investor with a heavy stake in Ally Financial Inc (NYSE:ALLY) is Cerberus Capital Management, led by Stephen Feinberg, which disclosed holding 41.52 million shares in its latest 13F.

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