Oaktree Capital Management LP, led by chairman Howard Marks, increased its stake in MGIC Investment Corp. while Perry Corp. lowered a holding in the mortgage insurer.
Oaktree had 12 million shares of Milwaukee-based MGIC as of June 30, according to a filing Wednesday, up from 4.5 million at the end of the first quarter. Perry cut its stake to 4.2 million shares from about 9 million, according to a document filed with regulators this month.
MGIC stock had rallied more than 170% this year as of Tuesday, benefitting investors including Perry, Oaktree and John Paulson who bet on a rebounding housing market. Mortgage insurers reimburse lenders when borrowers default and foreclosures fail to recoup costs. MGIC on July 23 posted
“Although the easy money has likely been made in the shares of MGIC, we believe there is still compelling value,” William Ryan, an analyst at Portales Partners, said in a note to investors Tuesday.
Oaktree also held more than $50 million in convertible notes of MGIC. Marks’s Los Angeles-based firm oversees more than $76 billion, with the largest allocation to bonds including corporate securities and distressed debt.
Richard Perry founded his hedge-fund firm in 1988 after working at Goldman Sachs Group Inc. Attempts to reach representatives from Oaktree and New York-based Perry weren’t immediately successful.
MGIC and rival Radian Group Inc. raised capital in the first quarter selling stock and convertible notes. The mortgage insurers survived the housing slump that forced companies like PMI Group Inc. and Triad Guaranty Inc. to stop writing new policies.
MGIC, led by CEO Curt Culver, rallied 86% in the first quarter, 23% in the next three months and another 20% from June 30 through Tuesday.
