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Viking Global Investors purchases nearly USD 620 million new stake in Bank of America Corp

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November 15
12:49 AM 2013

Viking Global Investors bought a new stake from Bank of America Corp in a deal worth close to USD 620 million. The hedge fund managed by O. Andreas Halvorsen purchased the stake at the end of September.

A regulatory filing revealed that in the third quarter, Viking Global Investors bought 44.9 million shares of the lender. A Bloomberg report said investors believed Brian T. Moynihan's promise that the bank was already done with the large share of the costs related to disputed mortgages. Moynihan is the Chief Executive Officer of Bank of America. The bank had already spent over USD 50 billion on litigation expenses, settlement costs and refunds, the report said. Moynihan had also said the bank would reduce USD 8 billion in its yearly operating costs by the end of next year. It will also trim USD 10 billion from its troubled loans in 2015.

From the end of September until today, shares in Bank of America increased over 7%. The jump had ranked the lender as the 11th  best performer in the KBW Bank Index comprising of 24 companies. In terms of assets, Bank of America is the second biggest bank in the US, following JPMorgan Chase & Co.

Aside from Viking, Theleme Partners and Steadfast Capital Management also purchased combined shares of over 11.1 million in the third quarter. New York-based hedge fund DE Shaw & Co also acquired nearly 8.5 million shares from Bank of America in the same quarter. Filings revealed that the new purchase brought DE Shaw & Co's total shares in the lender to 11.5 million. As of the end of September, the shares were estimated to be worth USD 159 million.

However, Appaloosa Management reduced its holdings by 4.1 million shares. David Tepper's firm now only has 2.2 million shares left of Bank of America worth nearly USD 31 million, according to a filing.

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