In light of recent events, we thought it might be helpful to reach out with our perspective on what’s happened and how we think the situation is likely to evolve from here. We’d welcome the opportunity for a more in-depth conversation on these recent events, the implications and outlook for the sector, and our Fund.
Highlights include:
- Three major banks have failed due to what we consider to be a “perfect storm” of events; These banks had unique characteristics that are not shared by very many others.
- This crisis in our view is very different from what occurred in 2008 and more akin to a classic “bank panic” – resolve the panic, and the crisis is likely over in relatively short order.
- That said, while we think we’re in the later innings, we’re not there yet, and the longer the crisis persists, the wider the group of banks that are likely at risk.
- The longer-term picture is more encouraging: bank stocks are trading at historically low valuations – the height of panic tends to be an excellent entry point.
