David Tepper ditches Oracle for US regional banks in bold hedge fund pivot
Hedge fund veteran David Tepper has shifted his focus from tech to banking. His firm, Appaloosa Management, sold off its entire stake in Oracle while building new positions in US regional banks like PNC Bank and Huntington Bancshares. The move comes as Wall Street analysts signal growing confidence in the financial sector.
Tepper’s fund exited Oracle completely in the third quarter of 2023. The tech giant’s stock had surged by roughly 40% in September after strong earnings but later gave up those gains. Appaloosa had held 150,000 shares in the company.
At the same time, the firm took stakes in several regional lenders. New investments included Regions Financial, Huntington Bancshares, Fifth Third Bancorp, and others like Truist Financial, KeyCorp, and Western Alliance Bancorp. Analysts suggest these banks could benefit from deregulation, such as lower capital requirements, which may boost lending and shareholder payouts.
The financial sector has faced challenges in 2023, yet optimism remains. Firms like Morgan Stanley and SoFi have labelled the industry as overweight or bullish. Tepper, who founded Appaloosa in 1993, has a long track record of high returns, often exceeding 25% annually. His fund now operates as a family office, managing his personal wealth.
Industry consolidation could also play a role. Regional banks may merge or be acquired, potentially offering premiums to investors like Tepper. His bets reflect a broader trend of hedge funds targeting undervalued financial stocks.
Tepper’s shift from Oracle to regional banks highlights a strategic pivot. If deregulation and mergers unfold as expected, his investments in banks like PNC Bank could see significant returns. For now, the financial sector remains a key area of interest for major investors like Tepper and his firm Appaloosa Management.
