A quarter after bullish investments in two consumer lender stocks, EJF Capital LLC, an Arlington, Va.-based hedge fund manager, reversed course and started trimming its positions, an analysis by S&P Global Market Intelligence found.
At the end of March, EJF reported $913.2 million in common stock investments, down 16.0% from the end of 2021, according to the firm's most recent Form 13F filing.
Founded in 2005 by Emanuel Friedman and Neal Wilson, EJF specializes in investments in financial services companies.
This article is part of a series on large institutional investors active in the U.S. financial sector. All institutional investment managers active in the U.S. with over $100 million in investments in Form 13F securities must file quarterly statements detailing their positions.
For an up-to-date summary of EJF Capital LLC's common stock investments, click here or go to EJF Capital's main page on the S&P Capital IQ Pro website and click "Public Holdings Detailed" under "Investments" in the left-hand menu.
Top holdings
During the first quarter, EJF sold 54.8% of its shares in consumer lender OneMain Holdings Inc., pushing its total investment in the company to $32.3 million, down from $75.5 million at year-end 2021, when it was EJF's second-largest common equity position.
Meanwhile, EJF's investment in buy-now, pay-later lender Affirm Holdings Inc. fell to $11.6 million from $28.7 million, after Affirm's share price fell 54.0% in the first quarter and EJF sold 12.3% of its stake in the company.
Affirm's shares have continued dropping in the second quarter, pushing its year-to-date return to negative 77.2% as of May 16, compared to a negative 15.5% return for the S&P 500. Shares in OneMain, by comparison, have returned negative 12.4% so far this year.
Jackson Financial Inc. became EJF's second-largest position as of March 31 after the firm increased its shares in the insurer by more than 2,200%, pushing its total investment to $77.8 million.
Jackson Financial, the largest individual annuity underwriter by premiums and considerations in the U.S. for much of the last decade, has seen its shares struggle in the second quarter, returning negative 25.3% compared to a negative 7.7% return for the S&P U.S. BMI Insurance index.
Silvergate Capital Corp. remained EJF's single-largest investment for the fourth quarter in a row. During the first quarter, EJF increased its shares in Silvergate by 29.0%, which helped push its total investment to $124.6 million as of March 31.
New entries
During the first quarter, EJF initiated 19 new positions worth a combined $70.3 million as of March 31. The firm's two largest initiations — a $15.2 million stake in Citigroup Inc. and a $12.2 million stake in Block Inc. — became its 10th- and 16th-largest common stock investments, respectively, at the end of the first quarter.
Exits
EJF completely exited 102 common stock positions in the first quarter that had been worth a combined $142.9 million at year-end 2021. Three of the exits — a $12.5 million position in New Jersey-based Bank of Princeton, a $12.2 million position in Walnut Creek, Calif.-based BayCom Corp. and a $10.7 million position in Bloom Energy Corp. — were all previously top-20 investments.
