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

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...