Sept. 21,2006 (Bloomberg) -- Amaranth Advisors LLC, the hedge- fund company that imploded after making wrong-way bets on natural gas, said losses swelled by $1.4 billion this week after the firm had to unload assets at a discount to avoid a shutdown.
Amaranth funds plunged 65 percent, or more than $6 billion, this month as of Sept. 19, founder Nicholas Maounis said in a letter to investors late yesterday. That leaves the Greenwich, Connecticut-based firm with less than $3.5 billion of assets.
The company handed over its energy-trading portfolio to outside investors and sold unidentified holdings to stem further losses, Maounis said in the letter. The steps were taken to ``avoid termination of our credit facilities and the risk of a consequent forced liquidation by our creditors,'' he said.
Amaranth, which had $9.5 billion of assets as recently as last month, has become the biggest hedge fund collapse since Long-Term Capital Management LP failed in 1998. The company agreed yesterday to allow Chicago-based Citadel Investment Group LLC, the $12 billion hedge-fund group run by Kenneth Griffin, and JPMorgan Chase & Co., the No. 3 U.S. bank, to take over its energy positions, said two people with knowledge of the decision.
more
