November 29, 2007
Some Hedge Funds Short SubPrime Debt
While many financial institutions and hedge funds are absorbing huge losses from the subprime crisis, others are reaping the rewards. One such man is John Paulson, a hedge fund manager controlling $7 billion in hedge fund money. While the majority of investors were content to ride the housing frenzy, Paulson believed the bubble was set to burst and keyed his investments in mortgage credit. In return, his Credit Opportunities funds rose an average of 340%, and he earned $1.14 billion in performance based fees during the first nine months of 2007. Other hedge fund managers had similar vision, and also invested against the housing boom. Philip Falcone of Harbinger Capital Partners collected $1.3 billion in performance fees over the same period. One fund, Lahde Capital, made 1,000 percent, after fees. He is returning money to investors rather than continue to invest it.
November 29, 2007 | Permalink
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