Managers Split on Subprime

Gates says the fund, which factors analyst downgrades and short-selling interest, rode Nova down to $4 before cashing out. Shares recently fetched $6.20.

Gates declines to discuss returns but says, "From our standpoint, we've made our money and we're moving on."

Meanwhile, Beacon Hill's White also says he went with his gut rather than a computer model when he jettisoned securities that might be tied to subprime.

"Too few [banks] were chasing good borrowers, and that had to end sometime," White says.

Few had such foresight. Caliber Global Investment Management Group, a mortgage investment fund listed on the London Stock Exchange, saw its shares lose a quarter of their value over six weeks.

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