Amaranth’s Future Remains Uncertain After $6 Billion Loss

Sep 30 2006 | 8:59am ET

Amaranth Advisors’ survival is anything but certain, in spite of claims last week by founder Nicholas Maounis that the fund had “every intention” of staying in business.

The Greenwich, Conn.-based hedge fund firm lost $6 billion (out of $9.5 billion in assets) on natural gas bets this month, may be less sanguine about its hopes this week, as redemption demands pour in and the Securities and Exchange Commission launches an investigation into the mess.

Two investors who met with Maounis told Bloomberg News that he said Amaranth needs to find a buyer, for all or part of the firm, to stay above water. Citigroup is reportedly interested, and its hedge fund chief, Dean Barr, spent a lot of time in Greenwich last week in discussion, but there is no indication when or if a deal will be struck.

Possibly worse still, SEC Commissioner Paul Atkins said the regulator is investigating “whether there was any misrepresentation to investors.” Amaranth has retained law firm Skadden Arps Slate Meagher & Flom to help it put
into place a system for redemptions and prepare for any possible lawsuits.

Meanwhile, the New York Mercantile Exchange said it warned Amaranth in August that its natural gas trades were too big, and that the firm cut some of the trades in response. And the man behind those disastrous trades, Brian Hunter, has left Amaranth. The firm wouldn’t say whether he had resigned or been terminated, but it did say he didn’t receive any termination pay.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Appraisal Ratio Key To Evaluating Hedge Funds And Other New Investments

Sep 29 2014 | 3:07pm ET

As a former finance professor Peter Hecht experiences heartburn every time he hears...

 

Videos

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The profitable power of confluence

The trading world is inundated with strategies and techniques. Here’s one way traders can get a handle on information overload.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.