BlueMountain's European Head Jeremy Barnum to Leave Hedge Fund

Date: Monday, December 4, 2006
Author: Hamish Risk, Bloomberg.com

(Bloomberg) -- BlueMountain Capital Management LP, a $3.6 billion hedge fund, said the head of its European office, Jeremy Barnum, is leaving the firm.

Barnum, 34, who joined BlueMountain in February last year, will be succeeded by founding partner Gery Sampere, according to an e-mailed statement. Barnum, who was previously co-head of North American credit trading for JPMorgan Chase & Co., didn't return calls to his mobile phone seeking comment.

``We mutually agreed that now was an opportune time to make the transition to new leadership in London,'' Chief Operating Officer Stephen Siderow said in a statement.

The departure comes five weeks after the fund made undisclosed losses in the credit derivatives market when cable television operator Liberty Global Inc. announced a surprise sale of bonds.

The cost of credit-default swap contracts based on securities sold by Liberty's Cablecom Holdings AG more than doubled in the 20 minutes after the company said it was to sell 300 million euros ($400 million) of bonds. Traders had expected the Zurich-based subsidiary would pay off its existing debt and that Liberty would use other units for future borrowing.

BlueMountain's Chief Executive Officer Andrew Feldstein said the hedge fund lost money as a result of the Liberty announcement and called for bonds issuers to consult with credit-default swap investors.

Credit-default swaps are financial instruments based on corporate bonds and loans that are used to speculate on an increase or decrease in indebtedness.

Growth in the contracts has outpaced all other markets for derivatives, financial instruments derived from stocks, bonds, loans, currencies and commodities, or linked to specific events like changes in the weather or interest rates. The securities are traded outside of exchanges, meaning there is no central place that records transactions or an authority to enforce rules. Stocks and futures contracts trade on exchanges that also act as regulators.

To contact the reporter on this story: Hamish Risk in London at hrisk@bloomberg.net