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March 14 (Reuters) – Hedge fund Citadel on Tuesday said it bought a 5.3% stake in Western Alliance Bancorporation (WAL.N), sending a strong signal of confidence as the company was swept up in growing fears of a broader financial crisis after two other banks were seized.
Western Alliance’s share price, which had tumbled on Monday, shot higher on Tuesday, rising as much as 43% shortly after the opening of trading. Earlier in the morning, its shares had been briefly halted for trading.
Citadel, run by billionaire Ken Griffin, earned $16 billion in profits for investors last year and its trades are closely watched by markets for signs of trends. Last year’s returns made Citadel the most successful hedge fund ever.
A Citadel spokesman declined to comment beyond the regulatory filing in which the investment was detailed.
Western Alliance was one of a number of banks caught in a crippling sell-off since last week when regulators shut down startup-focused bank SVB Financial Group (SIVB.O) that triggered worries of a contagion and rippled across financial markets. Signature Bank was also shut down by regulators.
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Earlier on Tuesday, CNBC reported that Ron Baron said he “modestly increased” his position in broker Charles Schwab (SCHW.N) to take advantage of a double-digit sell-off.
Reporting by Svea Herbst-Bayliss in Boston, Mehnaz Yasmin in Bengaluru; editing by Uttaresh Venkateshwaran
Our Standards: The Thomson Reuters Trust Principles.
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