BlueMountain Capital Management is riding credit swaps and the equity portfolios of credit derivatives to enjoy returns double that of the average hedge fund this year.
The $4 billion New York-based firm's flagship Credit Alternatives Fund is up between 8.5% and 9% this year, Bloomberg News reports. The bulk of those returns—some 80%—come from the hedge fund's trading in individual credit swaps as well as its investments in the equity portions of collateralized-loan obligations and default-swap indices.
The Credit Alternatives fund has $2.6 billion in assets under management.
The average hedge fund has returned about 4.5% this year, according to industry indices.