When Amaranth Advisors, the $9.5 billion hedge fund, collapsed, Citadel Investments and JPMorgan swooped in for the leftovers. After the Sept. 11 attacks and Hurricane Katrina, reinsurance companies sprouted like weeds to take advantage of soaring premiums.
So it is no surprise that the meltdown of the subprime mortgage market is producing a who’s who of winners and losers among hedge funds.
Some hedge funds have made a killing. Paulson & Company, an $11 billion hedge fund in New York, had such a strong belief that the subprime market would fall apart that it started two funds last summer concentrated solely on expecting such a collapse. Paulson’s Credit Opportunities Funds, now with more than $1 billion, were up 67 percent for February and about 82 percent for the year to date. A spokesman for Paulson declined to comment.
