Legendary bank investor Harry V. Keefe Jr. says the worst beating he has ever taken on an investment in a bank or thrift has been on his stake in a struggling midsize California thrift, Fidelity Federal Bank.

Mr. Keefe's investment firm, New York-based Keefe Partners, became one of the $3.5 billion-asset thrift's biggest shareholders when it invested in a Fidelity Federal recapitalization in August 1994. Other notable investors in that recapitalization, which was led by a unit of J.P. Morgan & Co., included Michael Price's Mutual Series Fund, Leon Cooperman's Omega Advisors Inc., and Wellington Management Co.

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