Amaranth Sells Energy Holdings

Amaranth, the big hedge fund that lost billions in a single week, is out of the energy trading business.

The fund, which once managed $9 billion in assets, told investors Wednesday that it had sold "the entirety of our energy portfolio" a week after it lost $4 billion on a series of calamitous natural gas trades.

Market sources say Amaranth sold its energy portfolio to J.P. Morgan Chase (JPM Quote) and Citadel, a big Chicago hedge fund.

Amaranth didn't comment on the sale. A J.P. Morgan rep didn't return a phone call. Citadel couldn't be reached for comment.

The sale of the energy trading group likely means the end of the road for Amaranth's nearly two dozen energy traders, including the group's head, Brian Hunter. The 32-year-old Hunter, once considered one of the hedge fund world's top traders, is believed to be responsible for the failed trading strategy that cut Amaranth's assets under management in half.

Speculation is growing on Wall Street that it's only a matter of time before Amaranth, which is based in Greenwich, Conn., closes up shop. Besides selling its energy portfolio, the hedge fund has been selling stocks and liquidating its holdings in dozens of so-called blank-check companies.

Amaranth also operates two in-house brokerages: Amaranth Securities and Amaranth Global Securities. The two brokerages are used by the hedge fund to trade stocks and commodities, as well as to engage in securities lending. A person answering the phones at Amaranth says the brokerages are still in business.