As the battle for Great Western Financial Corp. grows more intense with each day, hedge fund manager Dale F. Jacobs scans one of his several computer screens with a small smile.

It doesn't matter whether the winner is California thrift giant H.F. Ahmanson & Co., the unfriendly suitor, or Washington Mutual Inc., the white knight, he said.

"Either way I'm a winner," said Mr. Jacobs, who invested in Great Western just before the company found itself an acquisition target.

Indeed, not only will his stake in the company appreciate substantially, but Mr. Jacobs, 53, anticipates that his shares in several other California thrifts will surge in the near future.

"Whoever loses is still going to be looking to acquire a company," reasoned Mr. Jacobs. "And they are likely to acquire another California thrift which I have a position in."

California thrifts that Mr. Jacobs thinks are excellent takeout targets include Firstfed Financial Corp., Santa Monica; Coastal Savings, Los Angeles; Downey Financial Inc., Newport Beach; Glendale Federal Bank; and First Republic Bancorp, San Francisco.

Other investors are wary of playing potential takeover targets, since deals may or may not ever happen. Mr. Jacobs is undeterred. Moreover, he does not shy from short-selling stocks-a strategy whereby investors profit from declining shares-or dumping a stock if it performs poorly.

Of course, those are some of the advantages of a hedge fund like Mr. Jacobs' Financial Investors Inc., based in New York. They are generally free to exploit even the smallest inefficiencies in the market, hopefully reaping big gains for the risks they take.

"If we buy Citicorp today and during the day the stock sells off and goes down 2 or 3 points from where we bought it, I am going to sell," said Mr. Jacobs, who spent 25 years as a banker before he started his fund five and half years ago. "I am just not going to hold it. I don't care what the reason was."

As for shorting, Mr. Jacobs pointed out that he is generally bullish on banks and thrifts and only shorts them for technical reasons as opposed to underperformance in a company.

"The intention of shorting is to have insurance against market declines that are substantial or unexpected," said Mr. Jacobs. "We may short because of a relatively high price/earnings ratio, or because a bank's stock performance has risen substantially more than its peer group-we don't think there is anything inherently wrong with the institution."

He also noted that his ability to short stocks permits him to be less apprehensive about rising interest rates, which often have other portfolio managers dipping into bank stocks and then jumping out.

"Clearly our portfolio reacted to the selloff in March" after the Federal Reserve raised interest rates,"but we remained pretty liquid." said Mr. Jacobs. The selloff also "gave us an opportunity to add some of the names that we like at lower values."

The various, and at times risky, techniques that hedge fund managers employ usually make their returns volatile. Yet George Van, president of International Advisory Group, a Nashville company that tracks and invests in hedge funds, said that Financial Investors has among the most consistent returns among financial hedge funds.

"Instead of hitting the ball out of the park once and then striking out a lot, he'd rather get two-base hits regularly," noted Mr. Van.

Financial Investors is one of 33 such financial funds in the country.

Other hedge fund consultants estimated that Financial Investors has $20 million to $33 million under management and has churned out annual returns averaging 20% over the last five years.

Mr. Jacobs declined to discuss the size and the performance of his hedge fund. But he has no problems talking enthusiastically about his portfolio.

Some of his largest positions, which do not exceed more than 4% of the portfolio, include Bankers Trust, Citicorp, and Mellon Bank Corp. Most of the portfolio is thrift stocks.

"There are a number of really good solid regional thrift companies that are performing as good or better than the comparable banking company, and selling at lower price-to-earnings and lower price-to-book ratios than the bank," said Mr. Jacobs.

"That's partly because they haven't been seen as bank-like enough," he said. "They're seen as thrift-like, which the investment community does not view as that great. After all, look at all the money that was lost in the '80s."

But as he sees it, the nation's thrifts will have several key advantages, including charters the states will make more attractive and, of course, great potential as takeover targets.

Yet another advantage in buying California thrifts, Mr. Jacobs said, is the goodwill lawsuits some of them have against the federal government.

The day the Supreme Court upheld a victory for the plaintiffs was a "huge payday" for Mr. Jacobs, he said.

He noted that Financial Investors has since lightened its position in those stocks, but he added:

"We will have opportunities to buy them cheap and ride them up, sell them, and then ride them back up again. There is no end to it."

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