Reuters reports that JP Morgan Chase's 'London whale' problem attracted some hedge-fund sharks in the second quarter.
New regulatory filings show that several big hedge-fund players loaded up on JPMorgan even as heavy losses on a soured credit derivative bet made by a trader known as the 'London whale' sent the bank's stock reeling.
It seems as though managers such as Jim Chanos, John Paulson and Jamie Dinan saw the stock's 22 percent drop in the second quarter as a buying opportunity.
Bloomberg reports, however, that Moore Capital, the hedge fund that had boosted its JPMorgan investment earlier this year, joined other firms in selling the bank’s shares following a multibillion-dollar trading loss.
Moore, the $15bn New York-based firm run by Louis Moore Bacon, sold its full JPMorgan holding of about 6.47m shares in the second quarter, according to a filing yesterday with the Securities and Exchange Commission. TPG-Axon Management LP, the $4bn fund run by Dinakar Singh, sold its stake of 3.13m shares.
At least 15 hedge funds or institutional investors cut or exited investments in the New York-based bank after the second-quarter disclosure of a trading loss that has grown to at least $5.8bn.
Hit the links below to access the complete Reuters and Bloomberg articles:
The Billionaire's Apprentice
The Buy Side: A Wall Street Trader's Tale of Spectacular Excess
