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BlueMountain: JPMorgan's Unlikely Hedge Fund Savior

BlueMountain helps JPMorgan get out of disastrous trades
BlueMountain: JPMorgan's Unlikely Hedge Fund Savior
Photograph by Jin Lee/Bloomberg

When JPMorgan Chase made its money-losing multibillion-dollar bets on the corporate bond market, hedge fund manager Andrew Feldstein took the opposite side and won. Feldstein, co-founder of BlueMountain Capital, also profited by helping the Wall Street bank unwind the trades, according to four people with knowledge of the strategy who asked not to be identified because the matter is private. He enabled JPMorgan to unload more than $20 billion of bets on a credit default swap index, two of the people say. In all, BlueMountain may have earned as much as $300 million, according to market participants familiar with the trades.

“Andrew Feldstein is one of the most creative and sophisticated investors in fixed income,” says Sarah Quinlan, founder of hedge fund advisory firm QAM in New York and a former BlueMountain investor. “It is not surprising that JPMorgan would reach out to him to assist in the unraveling of this complicated and very public situation.”