Mortgage investors mint mega year


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