East Lodge Capital founder Ali Lumsden was among the few to post huge gains during thefinancial crisis , but his main fund slipped 26% in March amid thecoronavirus pandemic, Bloomberg reported Tuesday.- The hedge fund focuses on securitized credit positions, a corner of the market particularly battered by the virus and related business closures. As revenue streams dry up, risk of companies defaulting on credit soars.
- Lumsden posted a 73% gain during the last
recession by betting against the subprime mortgage market. - Visit the Business Insider homepage for more stories.
When the last global recession roiled
East Lodge Capital's main fund sank 26% through March, Bloomberg reported Tuesday, as the outbreak gripped assets of all kinds and likely pushed the world economy into a deep recession. The London-based firm saw a 16% monthly loss through another one of its funds.
Lumsden's office focuses on securitized credit positions, according to Bloomberg, one of the markets slammed hardest by the virus. Widespread lockdowns to stem the outbreak's contagion wiped out several companies' revenue streams, escalating the risk of late payments and defaults. While central banks and governments have been quick to issue emergency relief, regulatory hurdles and glitches have kept several firms from tapping the credit facility.
The March tumble marks a sharp reversal from Lumsden's last recession-era performance. The manager was among the few to bet against
East Lodge manages $1.9 billion of assets and invests through a global structured credit fund, a European structured credit fund, and a specialty
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