Wall Street Folly

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List of funds potentially caught in the Dreier scandal is a who's who, including Amaranth's Nick Maounis (who as you may recall, started up another fund called Verition)

A list of hedge funds and other investors who may have gotten bamboozled in the Mark Dreier swindle is found in a grand jury subpoena attached to a court filing made by Dreier's court-appointed receiver Mark Pomerantz. The subpoena requires that any documents pertaining to those funds be produced, so while it doesn't necessarily mean that they all lost money, they're presumably somehow involved (and we'll guess that most of them probably did lose). There are some heavy hitters on the list, including Paulson & Co, Elliott Associates, Davidson, Kempner, Baupost, Sandell Asset Management, Fortress, Perella Weinberg, GSO (Blackstone's alternative investment arm) and Eton Park.  Also notable on the list is Verition -- run by Amaranth's iceberg hitting captain, Nick Maounis. Did he step in it again and strike yet another iceberg?

Brian Hunter wins again in July

Former Amaranth gas trader Brian Hunter continues to be on a roll at his advisory gig with Boston based Peak Ridge Commodity Volatility. The fund was said to be up another 24% in July, and at least 230% this year...

Hunter, Touradji Hedge Funds Gain as Commodities Sink - Bloomberg.

Former Amaranth trader Brian Hunter talks!

He's been essentially mum since losing all of those billions in the ill fated natural gas trade that felled Amaranth, but now Brian Hunter, the trader at the center of the implosion is talking.  Bethany McLean, Fortune Magazine editor-at-large, stalked him all the way to Calgary and he agreed to talk to her.  After a failed attempt at opening his own firm, Solengo, he's now consulting for Peak Ridge Capital, where he works on trading models and strategies.  He's apparently enjoying it, telling McLean  "I never enjoyed the trading. I liked the design. This allows me to do what I like to do. I don't have to deal with investors - or risk management."   

Peak Ridge is up over 200% since its November start up.   So what made Hunter, who has often deflected the press when he's answered the door by saying that Brian Hunter wasn't there, talk to McLean?   She doesn't say why Fortune got the big interview. But somehow she got an audience with him and  he had a story to tell.  While there's still no picture of him, McLean describes how he looks.  But at least you can get a mental picture of him:

Amaranth's former chief is planning on opening a new fund later this year

Nick Maounis, skipper (and risk manager extraordinaire) of the imploded $6+  billionish hedge fund Amaranth, is trying to make a comeback later this year with a so far modestly sized $200 million multi-strategy fund venture called Verition Fund Management LLC.  Verition is based on a derivative of the Latin 'veritas' or 'truth'.  (Maybe it's a combination of truth and fiction, thus Verition....). For those who haven't seen the yearbook picture of Nick at the left, it's circa 1976-77 --- one of his former classmates sent it to us some time ago.

``Many of you have inquired as to my future plans,'' Maounis wrote. ``I welcome the opportunity to speak with you personally about my new venture.''

Maounis plans to open Greenwich, Connecticut-based Verition Fund Management LLC later this year with more than $200 million, according to two former investors briefed on the venture. Clients with money in Amaranth when it shut down won't pay incentive fees for three years, said the investors, who asked not to be identified because the fund is private. While the fund won't charge a management fee, all investors will pay the fund's expenses.

Former Amaranth trader Brian Hunter is back from the dead

Brian Hunter has risen from the dead according to Bloomberg.  The former Amaranth energy trader who helped push that firm into oblivion in 2006 when his nearly market-cornering natural gas bets went bad (to the tune of over $6 billion), now advises Peak Ridge Commodity Volatility Fund, which focuses on mainly trading energy contracts, and is run by Boston private equity firm Peak Ridge Capital.  Apparently the firm is doing quite well -- at least so far -- having gained 6 percent in March, 49% for the March quarter, and 103 percent since starting up in November according to unnamed fund investors.

You may recall that Hunter tried to start up another energy trading venture, Solengo Capital, after the Amaranth debacle, but it never got off the ground on account of legal issues, even though he was said to have had no shortage of investors.  The Peak Ridge fund directly hired 10 Solengo employees, but not Hunter, who's now an advisor. Investors say that Hunter has no trading authority (although we'll take a wild guess that his advice drives the trading).  And thankfully, he has no part in the firm's risk management.

``For some investors, Hunter's name is a red flag and they will avoid the fund,'' said Patrick Tuohy, global head of sales and marketing at HSBC Holdings Plc's alternative investment group, which invests about $55 billion in hedge funds. ``However, some may dig deeper because in the past he did deliver some spectacular returns.'' HSBC's hedge fund group is not an investor in Peak Ridge's fund.

Former Amaranth traders hired by Moore Capital get the boot after big losses

The team of Canadian traders picked up last year by Moore Capital after the spectacular collapse of hedge fund Amaranth have been given the boot for poor performance.  They were based in Toronto.

Moore announced that it is closing down the office in a statement obtained by HedgeWorld. Approximately 15 people were laid off on Dec. 12, said a person familiar with Moore's operations. In plain language, the traders did not make money on the books they managed.

Louis Bacon runs Moore Capital, a New York-based hedge fund with more than $13 billion in assets. Following Amaranth's September 2006 meltdown, Moore created Moore Canada, a new unit based in Toronto. Manos Vourkoutiotis, a former top executive and trader at Amaranth, was named to head up the new unit. A team of several senior traders joined Mr. Vourkoutiotis, nine of whom were from Amaranth Advisors Canada

Amaranth traders hired by Moore Capital lost 15% in November

November proved to be a totally nasty month for many hedge funds.  And a Canadian hedge fund started last year by Moore Capital and the traders that they hired out of the carcass of Amaranth after it imploded was one of them that got stung: 

A group of former Amaranth Advisors LLC traders, recruited last year to start a Canadian hedge-fund unit for Moore Capital Management Inc., lost 15 percent in November, two people with knowledge of the firm said.

The Toronto-based unit, which managed $1 billion before the decline, opened a year ago to invest money for other Moore funds. It is overseen by Manos Vourkoutiotis, who was hired by the New York-based firm after Amaranth collapsed in September 2006. Last month's performance was hurt by stock and convertible-bond bets.

With Solengo sounding dead, Brian Hunter has a new consulting gig

Brian Hunter has a new gig.  And it's not with Solengo, the apparently dead on arrival energy trading firm he was trying to get off the ground.  According to online energy news site Sparkspread as reported on Financial News Online, the former Amaranth energy trader who lost $6 billionish for his old firm is now a consultant to a new commodities hedge fund run by private equity firm Peak Ridge Capital.  The fund, Peak Ridge Commodities Volatility Fund Segregated Portfolio, will specialize in natural gas, crude oil and electricity options.  He's said to be investing $10 million of his own money in the firm.

Sounds like his new firm is going to great lengths to insulate themselves, and not show that he's an official employee, no doubt because of all of the lawsuits that are swirling around him.  Hunter will provide advice through PRCV Consulting, an entity that he owns.  He'll be providing his services to Helmsmen Advisors, the new fund's Bermuda adviser.  We wonder if the rest of the would be Solengo crew is coming with him.  We're guessing 'yes'.

So Long-o, Solengo? Brian Hunter's new firm may close its doors without doing a trade

In an eighteen page document filed in federal court in Washington DC on Friday, former Amaranth energy trader and Solengo Capital founder Brian Hunter disclosed that his firm may already be close to toast.  Given all of the litigation filed against Hunter, two directors of his new venture have resigned and investor interest has evaporated:

According to Hunter, as a direct result of FERC’s order to show cause filed two weeks ago, Solengo has lost fund directors, investment staff and potential investors, and he has seen two other business deals go down the tubes.

“The FERC’s OSC has continued to damage Solengo Capital Advisors and the company is now on the brink of complete disintegration,” he wrote in the supplemental declaration, filed on Friday.

Hunter, of course, also faces a Commodity Futures Trading Commission enforcement action for attempted market manipulation, but he argues that the CFTC action is small potatoes—survivable, while the order from FERC, whose jurisdiction he rejects anyway, is potentially fatal.