Mark Stupfel launched his own hedge fund, Cortex Capital, using an investment from its former employer, John Kleinheinz. Stupfel worked as a portfolio manager at Kleinheinz Capital Partners, which was closed in 2013, and launched his own hedge fund, which is based in Fort Worth, Texas, concentrating the investment team from Kleinheinz. The fund started with around $100 million, and for the second quarter of 2014, it reported an equity portfolio worth $138 million. The largest portion of the equity portfolio, around 45%, is concentrated in the Financial sector, with two of the top three long positions in terms of value being represented by Ocwen Financial Corp (NYSE:OCN) and Citigroup Inc (NYSE:C), being on the first and third spot respectively. On the second spot is Gildan Activewear Inc (USA) (NYSE:GIL). In this article we will discuss Cortex’s top three largest positions from its latest 13F filing.
Cortex’s stake in Ocwen Financial Corp (NYSE:OCN) is amassing around 12.80% of its total equity portfolio value. The fund owns 475,000 shares of the company, worth $17.6 million. The fund has raised its exposure to the financial company by 24% over the quarter. Many other hedge funds from those that we track, have raised their stakes in Ocwen Financial Corp (NYSE:OCN). For example, Leon Cooperman‘s Omega Advisors increased its position by a tenfold to around 2.58 million shares. Jonathon Jacobson’s Highfields Capital Management has raised its stake by over 300% to approximately 4.61 million shares.
Overall, Ocwen Financial Corp (NYSE:OCN), which is engaged in servicing and origination of mortgage laws, has reported a net income of $142.8 million, equal to $1.02 per share for the first six months of 2014, which is above $121.9 million, or $0.84 per share posted for the same period of last year. In addition, the company increased its revenue by 16% on the year to $1.1 billion.
Next on the list is Gildan Activewear Inc (USA) (NYSE:GIL), in which the fund reported a $8.54 million stake, which amasses 145,000 shares, down by 4% on the quarter. Gildan is a company that markets non-fashion apparel products. The stock of the company gained around 4% since the beginning of the year. Another shareholder of Gildan Activewear Inc (USA) (NYSE:GIL) is Eric Sprott‘s Sprott Asset Management, which last reported holding 436,000 shares held as of the end of June.
As it was mentioned earlier, Cortex’s third-largest stake is represented by Citigroup Inc (NYSE:C), of which the fund reported holding 160,400 shares, down by 36% over the quarter. The value of the stake amounts to $7.56 million, which represent close to 5.5% of the company’s equity portfolio. In addition, Cortex owns around $11.78 worth of Citigroup Inc (NYSE:C)’s Call options, which have been acquired during the second quarter.
The stock of the financial services holding company gained around 3% since the beginning of the year. After a charge of some $3.8 billion to settle its Residential Mortgage-Backed Securities (RMBS)-related claims, Citigroup Inc (NYSE:C) reported a net income of only $181 million, or $0.03 per share, for the second-quarter, which is significantly below the $4.2 billion, or $1.34 per share, for the same period of last year. The company’s revenues slightly declined to $19.3 billion, from $20.5 billion. Among the hedge funds that we track, the largest shareholder of Citigroup Inc (NYSE:C) is Seth Klarman‘s Baupost Group, which owns 122.57 million shares as of the end of the second quarter.
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