A Texas-based investment group more than doubled its stake in Hawthorne Financial Corp., a $1.4 billion-asset thrift in El Segundo, Calif., that finances high-end residential properties.

Portfolio II Investors, which includes members of the well-heeled Bass family in Fort Worth, raised its stake in Hawthorne from 8.7% to 21.5%, according to an Oct. 23 Securities and Exchange Commission filing. The partnership was one of the investors that helped recapitalize Hawthorne in 1995 after its board replaced key executives and restructured the company.

The bulk of the partnership's stake consists of warrants that can be converted into 790,000 shares of common stock this year. Portfolio II got the warrants when it invested in Hawthorne.

It also bought 41,900 shares of Hawthorne at prices ranging from $14.25 to $15.26 per share.

Norman Morales, chief financial officer at Hawthorne, said the company is pleased to see that the partnership recognizes its value. "It's a small investment for them, but it is a big deal to us," he said.

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