Eminence Capital, the $6.4 billion investment firm led by Ricky Sandler, took stakes in JPMorgan Chase & Co. and Webster Financial Corp. as it builds its bet on financial services.
The firm also added to its holdings of American International Group Inc., Sandler told clients in a July 29 letter obtained by Bloomberg News. AIG is the firm’s largest position, he wrote.
Eminence is wagering that banks and insurance companies will benefit from rising interest rates, U.S. loan growth and an end to regulatory and legal charges that have eroded profits. The firm more than doubled its position in financial services companies to 10 percent in the past few months.
“The increased regulatory requirements to hold more liquidity make these businesses even more positively exposed to rising rates than in the past as an increasing part of their assets have a short duration,” Sandler wrote in the letter.
The Standard & Poor’s 500 Financials Sector Index has gained 1.6 percent in 2015, edging the 1.1 percent increase in the S&P 500 Index.
The firm’s main hedge fund rose 0.1 percent in the second quarter, bringing gains for the year to 1.8 percent, according to the letter. Winning bets on Men’s Wearhouse Inc., AIG and Vivendi SA were mostly offset by losers, including Michael Kors Holdings and Keurig Green Mountain Inc.
The general counsel for Eminence declined to comment on the letter.