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After nine years at Mendon Capital Advisors Corp., where he was managing director and head of trading, Robert Bolton left last year to launch his own hedge fund.
Bolton's Iron Bay Capital Inc. marked its first anniversary last month. He is its sole proprietor and portfolio manager of the Iron Bay Fund L.P.
The fund invests in stocks of financial services companies. Bolton would not disclose the fund's size or returns, but he said he intends to limit the portfolio to 50 stocks or fewer.
The fund returned 6.19 percent in the first three months of 2012, a company newsletter reports. It reported returns of 5.04 percent for the last three months of 2011 after a loss of 0.64 percent in September 2011.
"The core strategy is built around the community bank space, companies of $10 billion in assets and less," Bolton said.
"There are 15,000 banks in this country; 7,400 of those banks are publicly traded," Bolton said. "Of the 7,400, about 80 percent of that number falls into the space I navigate in. I'm looking for the fantasy sports lineup of banks in that 7,400-bank world."
Some 80 percent of the portfolio is bought and held for longer terms, he said, with 20 percent actively traded.
In the Rochester market, Bolton likes Five Star Bank, a subsidiary of Financial Institutions Inc., which is based in Warsaw, Wyoming County.
"I think (President and CEO) Peter Humphrey is a great manager," Bolton said....