(Proactive) - Bond king Bill Gross, co-founder of Pimco, announced on Friday that he has purchased shares of four regional banks as well as an exchange traded fund (ETF) made up of banks, including Western Alliance Bancorp, Synovus Financial Corp, PacWest Bancorp, and the SPDR S&P Regional Banking ETF, MarketWatch reported.
Gross wrote in his latest Wall Street Playbill that he’s had a “long-term wish to own a bank,” adding that “it’s a license to make money even when run conservatively”.
“Admittedly, regionals will have their cyclical problems if and when a recession occurs but my long-time wish to own a bank is now possible via public markets,” Gross said.
“Recent return on investments of 9%-10% at 60% of book provide an enticing long-term investment and many smaller regionals may be gobbled up by larger counterparts at premium-to-market bids,” he added.
Shares of many US regional banks have fallen 30% to 40% since early March, as jittery investors sold stock over potential runs on deposits and the below-par value of their securities portfolios.
Gross noted he is not currently in a legal position to recommend stocks since he no longer serves as a fund manager officially.
