Managers Split on Subprime
Taking a similar view is hedge fund Magnetar, which was founded by former executives at Citadel Investment Group and Glenwood Capital Investments. It is said to have raised some $500 million for a long/short mortgage fund to plow into derivatives and other structured securities tied to subprime, according to industry newsletter Derivatives Week.
David Snyderman, head of global fixed income at Magnetar, directed calls to a spokesman who declined to comment on the firm's activities.
And Magnetar isn't the only shop scouring for value in subprime. Brigadier Capital Management -- an asset management arm of financial services firm Cohen & Co. -- is on the prowl, according to Ralph Nacey, chief investment officer at Brigadier.
Nacey says Cohen launched Brigadier nearly six months ago, anticipating subprime carnage."We thought there'd be opportunities," he says. "I don't think anyone could have predicted the speed at which things unfolded." Brigadier raised some $120 million for investments back in November and could raise another $80 million shortly. Nacey declined to discuss specifics about the fund, including returns. Rich Gates, portfolio manager in West Chester, Pa., at TFS Market Neutral Fund, began shorting Novastar in January, when the stock was trading in the $26 range. The mutual fund is a quantitative investment fund that employs some hedge fund savvy to make its bets.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV