(HedgeCo.Net) LMR Partners, a $12.8 billion multistrategy hedge fund, has lost one of its marquee traders, Andrew Berger, following a painful reversal in a mortgage-backed securities (MBS) trade. Business Insider
Berger, who helmed a profitable mortgage desk at LMR, had generated nearly $250 million in gains during 2024. But in 2025, a levered strategy in U.S. residential MBS markets unraveled, erasing over $100 million in year-to-date gains and contributing to a 0.9% monthly loss for LMR. Business Insider
The MBS market has become increasingly sensitive to interest rate dynamics, credit spreads, and borrowers’ behaviors. Under heavy leverage, small moves can amplify losses. In this case, rate volatility and bond supply shocks appear to have caught the team off guard. Business Insider
Berger joined LMR in 2022 from Credit Suisse and was widely viewed as a rising star in securitized-products trading. His exit is likely to prompt internal changes and revaluation of risk frameworks across the firm. Neither LMR nor Berger have provided public comment thus far. Business Insider
This episode is a stark reminder of the risks inherent in niche, high-leverage strategies—even in sophisticated multistrategy platforms. As yields shift and credit markets roil, hedge funds must continuously monitor tail risks in fixed income, especially in sectors that once seemed “safe.”