Maounis Hires Former Amaranth Colleague for Two-Year-Old Fund in Canada

Date: Friday, October 15, 2010
Author: Katherine Burton, Bloomberg

Nicholas Maounis, the hedge-fund manager whose Amaranth Advisors LLC collapsed under a record $6.6 billion loss in 2006, has hired his former partner, Manos Vourkoutiotis, to run investments in Canada for his two-year-old hedge fund, according to a letter sent to investors.

Vourkoutiotis “will focus primarily on convertible arbitrage, credit trading, long/short equity, and volatility trading within the Canadian market,” Maounis said in the letter.

Three of Amaranth’s four partners are now working at Greenwich, Connecticut-based Verition Group LLC fund, which manages $250 million. The Verition fund invests in credit markets, convertible bonds and stocks, including those of companies going through corporate events such as mergers and bankruptcies. It also has a team that manages money using computer models.

The fund’s onshore version has climbed 4.2 percent this year and the offshore version is up 4.3 percent, according to the letter. That followed gains of 18 percent and 17 percent, respectively, in 2009.

“I have significant experience in managing each of these strategies, and continue to refine my approach to them,” Maounis wrote in the letter, adding that the fund’s size has been an advantage in navigating the volatile markets of the last two years.

Verition, derived from the Latin word for truth, has about 35 employees, up from 19 when he started the fund in October 2008.

Amaranth

Maounis, 47, a former convertible-bond trader, opened Greenwich-based Amaranth in September 2000 with $600 million. His goal was to build a firm like Kenneth Griffin’s Citadel Investment Group LLC in Chicago, which uses multiple strategies to trade securities including stocks, bonds, currencies and commodities. By August 2006, Amaranth’s assets had climbed to about $9.5 billion.

In September of that year, bets on natural gas made by trader Brian Hunter lost about $4.6 billion in one week. By month’s end, the losses had risen to $6.6 billion, the most by a hedge fund at that time, resulting in a 60 percent loss for 2006.

To contact the reporter on this story: Katherine Burton in New York at kburton@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net