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Former LTCM trader surfaces at London-based hedge fund

Date: Tuesday, July 13, 2010
Author: Oliver Shah, City A.M.

ONE of the survivors of Long-Term Capital Management (LTCM), the US hedge fund infamously bailed out by Wall Street in the late 1990s, has resurfaced at London-based Capula Investment Management.

Ayman Hindy became a partner at Capula last week, according to a regulatory filing. He has been working at the government fixed income specialist for some time as a senior portfolio manager, City A.M. understands. He moved to its US office in June.

Hindy was a strategist at LTCM when it ran into trouble just over a decade ago. The fund ballooned to control more than $100bn (£67bn) assets at its peak, wowing investors with heady returns achieved through highly leveraged arbitrage trades. But LTCM suffered gargantuan losses after Russia defaulted on its debts in 1998 and had to be rescued up by its creditors, including Goldman Sachs and Barclays, in a move arranged by the Federal Reserve. It closed in 2000.

At the time, Hindy was quoted as saying: “The models tell you where things will be in five years. But they don’t tell you what happens before you get to that moment of certainty.”

Capula was launched in 2005. As of last year it ran $3.5bn of assets.