Mortgage investors mint mega year
By Lawrence Delevingne
Fri Jan 18, 2013
Marathon, Pine River, BTG Pactual, others finish 2012 with eye-popping returns.
Steve Kuhn, Pine River Capital Management's jovial, bald headed mortgage master, called it early. "I simply love the mortgage market. It's the best place to be right now," Kuhn told a small roomful of people at SkyBridge Capital's SALT conference in May. "It feels like everyone wants to be a mortgage hedge funds manager these days."
Kuhn was right. The mortgage backed securities story took hold over the following months as money poured into the strategy and hedge funds in it put up the industry's best numbers: nearly everyone had double-digit returns and a few pushed into the 30% to 40% range, home run territory.
Today, the question on investor minds is whether the stellar gains from investing in MBS can last. But what a year it was. The median manager in the strategy gained 15.61% for 2012, according to the Absolute Return MBS Index, compared with a 6.49% composite...
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