BlueMountain Made $300 Million On JPMorgan Nightmare

Jul 3 2012 | 1:21pm ET

BlueMountain Capital Management—which is now helping JPMorgan Chase unwind its disastrous derivatives trades—looks like the biggest winner in the bank's debacle.

The hedge fund, run by JPMorgan veteran Andrew Feldstein, is likely to make as much as $300 million betting against the JPMorgan credit default swap index trades, Bloomberg News reports. The profits from the trade have helped nearly double BlueMountain's returns this year: Before JPMorgan announced its multi-billion dollar loss, the hedge fund was up 5.4% on the year. Now, it's up 9.5%.

BlueMountain likely did even better opposing JPMorgan trader Bruno Iksil than Saba Capital Management, whose Boaz Weinstein has received much of the credit for harpooning the so-called "London Whale." Saba is up just 2.3% this year.

BlueMountain is now helping JPMorgan unwind its trades, which could cost it as much as $9 billion. The hedge fund has been quietly buying default protection to cover JPMorgan's trades and then selling it to the bank, helping it exit about half of its exposure.


In Depth

Q&A: Rotation Capital's Rothfleisch On SPAC 2.0

Aug 11 2017 | 7:43pm ET

Corporate actions have long been a staple of event-driven investors, but activity...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Star Mountain: Private Lending in the Lower Middle-Market

Aug 14 2017 | 4:45pm ET

Private credit has become one of the most popular alternative asset classes in recent...

 

From the current issue of