Peloton Partners in $2bn assets sale
- From: Doobie Keebler <dan.ader@xxxxxxxxx>
- Date: Thu, 28 Feb 2008 19:55:57 -0800 (PST)
"It is the classic story of when leverage goes wrong," one investor
said. "But I can't believe this problem is confined to these guys
alone."
(Q: Who else shorted the sub-prime meltdown and bought back in
after? A: Goldman)
..
..
"Peloton Partners in $2bn assets sale"
By James Mackintosh - The Financial Times
Published: February 28 2008
One of London's most successful hedge funds imploded Thursday when
Peloton Partners put the assets of its $2bn flagship fund up for sale
and froze its remaining fund after geared mortgage bets left it unable
to meet lenders' demands.
Rumours of the crisis at Peloton's ABS fund, named best new fixed-
income hedge fund last month, helped drive the high-quality mortgages
in which it was invested to all-time lows this week as traders
prepared for $9bn of assets to be dumped.
The losses are particularly striking because Peloton ABS was one of
the big winners from the US subprime crisis, gaining 87 per cent last
year after betting against low-quality mortgages.
But last month Ron Beller, co-founder, told the Financial Times that
the firm had begun investing in "good-quality assets that are trading
at deeply discounted prices" - including a large position in AAA-rated
mortgages.
Investors in Peloton said the crisis was a surprise as estimated
returns for the month to last Friday showed it down only just over 8
per cent.
- more -
http://www.ft.com/cms/s/0/c5d43fb2-e62c-11dc-8398-0000779fd2ac.html
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