Hedge fund reveals 5% First Acceptance stake

Investor in 2010 stepped into Tennessee Commerce

A New York hedge fund that specializes in financial services companies has been busy so far this year adding to its stake in First Acceptance, the Green Hills-based parent company of the regional Acceptance Insurance franchise.

Second Curve Capital on Monday said it now owns 5.3 percent of First Acceptance, which had 2013 revenues of $241 million and does business in 12 states. The company's shares (Ticker: FAC) are up 7 percent year to date and more than 60 percent over the past six months, giving it a market cap of $100 million.

The nearly 2.2 million First Acceptance shares now held by Second Curve are up from fewer than 1.4 million shares at Dec. 31 and make the firm the company's No. 2 investor behind controlling shareholder Gerald Ford. At the end of 2013, Second Curve managed about $480 million for its clients. It is run by former bank analyst Tom Brown.

Brown, pictured here, has ventured into a Middle Tennessee company once before, in the summer of 2010, when he bought a 5 percent stake in the former Tennessee Commerce Bancorp. After building his stake to more than double that, Brown began selling his position the following summer when Tennessee Commerce ran into serious regulatory trouble.