Affiliated Managers Group Inc., the company with stakes in firms overseeing $385 billion, increased its investment in BlueMountain Capital Management LLC.
A “significant portion” of the proceeds from AMG’s boosted minority stake will be invested in BlueMountain’s more than $7 billion of hedge funds, according to a statement from AMG today. As part of the deal, former JPMorgan Chase & Co. credit derivatives pioneer Andrew Feldstein, who co-founded BlueMountain in 2003, extended employment commitments with the New York-based firm along with seven partners and the other members of its management committee, AMG said.
BlueMountain’s $4.5 billion main credit fund, which returned 10.4 percent this year through July 13, has benefited from taking the opposite side of botched credit-default swaps trades at JPMorgan that led to $5.8 billion in losses for the biggest U.S. bank. The firm helped the lender unwind more than $20 billion of swaps positions, market participants familiar with the transactions said last month.
Doug Hesney, a spokesman for BlueMountain, declined to comment.
AMG, which holds stakes in 27 money managers from London to San Francisco, reported second-quarter earnings today that dropped 85 percent from a year earlier. Net income of $6.6 million in the three months ended June 30 was down from $45.5 million in 2011, AMG said in a separate statement today.
AMG’s $7.1 billion net inflow last quarter is “especially notable given the muted investor risk appetite observed by the industry generally,” Sean Healey, AMG’s chief executive officer, said in the statement. AMG specializes in taking stakes in boutique asset managers, typically allowing management to own a portion of their business and remain operationally autonomous.