Houston Chronicle – Huge trading losses at Amaranth Advisors belie the notion that “multistrategy” hedge funds are safer than their single-strategy peers and could lead to calls for more transparencyand controls, experts said Tuesday.<\/p>\n
The $9 billion Amaranth fund told investors its year-to-date losses may top 35 percent as a result of wrong-way bets the price of natural gas would rise. The losses will almost certainly overshadow gains in any of its other strategies and seriously threaten the future of the fund.<\/p>\n
While Amaranth said it was working to limit investor losses and pay creditors, some experts expect investors to abandon the firm and leave it a shadow of its former self, if it survives at all.<\/p>\n
“Fifty percent is a yardstick that some people use to say that once you have dropped that much, the game is over,” said Roger Ehrenberg, chief operating officer of Monitor110, a data provider for institutional investors.<\/p>\n