Four years after his Amaranth Advisors crashed and burned in one of the most spectacular hedge fund collapses in history, Nicholas Maounis plans to get back in the game.
Maounis has begun approaching potential investors and others on Wall Street, aiming to raise $1 billion for his Veriton Fund Management, which he set up in 2008 to manage his own money. He has also begun hiring for the firm, which now boasts some 32 staffers, including a dozen Amaranth veterans and an investor-relations chief, The Wall Street Journal reports.
Amaranth blew up in September 2006 after natural gas trades made by the firm’s Brian Hunter went bad, costing the firm more than $6 billion. Amaranth is still working to return whatever money it has left, although it has been hamstrung by illiquid investments and legal and regulatory actions against the firm.
Unsurprisingly, Maounis is stressing risk management in his new venture, promising, among other things, not to trade natural gas. Maounis has styled himself as Veriton’s chief risk officer, and has hired Risk Resources to monitor risk on a daily basis.
“There has been a comprehensive limit structure put in place on every single portfolio in the fund, and efforts are made to adhere to those,” Risk Resource’s Ken Grant told the Journal. Those limits are designed to speak to concerns that Amaranth, ostensibly a multi-strategy firm, was able to lose some 70% of its assets on one bet.
Maounis can also point to a nice track record managing his own money: Greenwich, Conn.-based Veriton returned 17% last year and is up 2% this year. It currently manages about $235 million.
At least one Amaranth investor is reupping with Maounis, telling the Journal that “you learn a hell of a lot” from a collapse like Amaranth’s. But some others expressed outrage that Maounis would begin fundraising before Amaranth has been totally liquidated.
“It’s outrageous,” Donald Shapiro told the Journal. “The fund was supposedly liquidated four years ago, and I just want to be done with it.”