Oct. 15 (Bloomberg) -- Now that their teams are out of the Major League Baseball playoffs, New York Yankees catcher Jorge Posada and Chicago Cubs outfielder Alfonso Soriano may turn their attention to a new hedge fund investment.

The star athletes' financial advisers, former Merrill Lynch & Co. employees Juan Collar and Anthony Fernandez, named them and two other Latino ballplayers as investors in the Miami-based hedge fund the advisers started in March, according to a July 12 private placement notice filed with the U.S. Securities and Exchange Commission. The fund plans to raise as much as $60 million.

``Baseball players are our niche market,'' Collar said in an interview. Pro athletes, with their multimillion-dollar salaries, have become investors in the latest financial instruments, along with wealthy software executives and investment bankers.

Jose Contreras, a pitcher for the Chicago White Sox, and Orlando Hernandez, a pitcher for the New York Mets, are listed along with Posada and Soriano as ``beneficial owners'' of Quantum Hedge Strategies Fund LP. That means they would have at least a 10 percent stake in the partnership -- $6 million each.

$12 Million So Far

The Quantum fund has about $12 million in assets so far, according to Mark Leeds, an attorney for the advisers' firm. Posada, Soriano and the other ballplayers could end up owning less than 10 percent of the fund each, he said.

``It's not a done deal,'' Leeds, an attorney in the New York office of Greenberg Traurig LLP, said of the athletes' stake.

Fernandez and Collar primarily invest in fixed income securities such as bonds, the attorney said. They generated profits for their clients earlier this year by betting against the mortgage market.

``They were short subprime,'' the term for home loans to people with poor or no credit histories, Leeds said. Collar and Fernandez ``made money in July and August hand-over-fist when everybody else was losing it.''

Soriano, 31, signed an eight-year, $136 million contract with the Cubs last November. Hernandez, 38, will receive a $5 million salary this year. Posada, 36, will get $12 million, and Contreras, 35, will get $9 million. In addition to Posada, the three others also played for the Yankees at one time.

Relying on Advisers

Posada, in a brief interview at Yankee Stadium last month, said Collar and Fernandez are his advisers. He said he wasn't familiar with the details of the hedge fund.

James Torres, an agent for Contreras, declined to comment. Agents for the two other players didn't return telephone calls.

Hedge funds are mostly private pools of capital whose managers participate substantially in the profits from their speculation on whether the price of assets will rise or fall.

Collar said he and Fernandez joined Merrill in the mid- 1990s and left two years ago to form their own advisory company, Quantum Family Office Group LLC. Its new hedge fund, which has no relationship with the Quantum Fund started by George Soros, plans to use a variety of strategies, including technical trading and investing in other funds, Collar said. He declined to elaborate.

$54 Million

According to an investment adviser registration filed with the SEC, Quantum Family Office Group had about $54 million in assets under management as of March 21, 2007.

Smaller managers sometimes pool client assets into hedge funds to reach minimum-investment levels set by funds of funds, said David Himmelreich, a principal at Hynes, Himmelreich, Glennon & Co., a tax and investment management firm in Darien, Connecticut. The standard minimum is $20 million.

``The baseball players couldn't get into the fund of funds individually,'' Himmelreich said.

To contact the reporter on this story: Miles Weiss in Washington at mweiss@bloomberg.net

Last Updated: October 15, 2007 00:10 EDT