Brian Hunter

Brian Hunter (* 1975 ) is a Canadian hedge fund manager who, through risky speculation, damaged his employer, the US hedge fund Amaranth Advisors , by around half of his fixed assets, about 4.5 billion US dollars. In 2007 Hunter founded the hedge fund Solengo Capital .

Life

Hunter grew up near Calgary , the capital of the Canadian province of Alberta . He studied mathematics at the University of Alberta , worked on oil drilling rigs in northern Canada during his studies and dealt with financial modeling and derivatives during his studies .

After graduating he became a 24-year-old for the pipeline -Gesellschaft TransCanada Corp . active. There he caught the eye of his superiors because Hunter recognized price anomalies early on. He was then allowed to make growing investments in natural gas options .

Hunter later moved to Deutsche Bank in New York City , where he made a profit of US $ 17 million in 2001 and US $ 52 million in 2002 with guest futures . He was then promoted and agreed to an annual salary and bonus of US $ 1.6 million. By December 2003, his department would have made a profit of US $ 76 million, due to losses of US $ 51.2 million . melted down in a week alone, highlighting the high risk of the energy sector. In February 2004, Hunter was relieved of his powers by Deutsche Bank and received no bonus. He was finally released in April 2004. In an ongoing process, Hunter tries to sue for his bonus and accuses Deutsche Bank of personally defaming him.

Although the CEO of the hedge fund Amaranth advisor Nick Maounis from Greenwich , Connecticut , knew about Hunter's problems at Deutsche Bank and was already considered a "child prodigy" by some in the industry , but also a ticking time bomb for others, Hunter received a contract with Amaranth for that Energy portfolio that Amaranth established as one of the first hedge funds immediately after the spectacular bankruptcy of Enron . The fund manager of the energy portfolio, Harry Arora , pursued a relatively conservative investment strategy and achieved an annual return of around 20 to 40% with a diversified investment . With his successful speculations, Hunter quickly achieved a status that allowed him to move from Greenwich to Calgary.

But Hunter wanted to create larger plants in the highly speculative gas market, whereupon Arora and Hunter agreed in summer 2005 to create separate trader books . This meant that each of the two could execute separate orders. Unlike any greenhorn in the investment sector, the max. With 2% of his assets on a single title, Hunter was willing to put it all on one card. In July 2006 he lectured that while the economic cycles in the oil business lasted years, they were a few months in the gas business, in which the transport problems are even more important. As a result of the two devastating hurricanes Rita and Katrina, Hunter achieved US $ 1 billion with his gas speculations in 2005, which has already made him a legend on Wall Street . By late August 2006 , he had made $ 2 billion in profit from natural gas deals since the beginning of the year. However, within a week he lost US $ 5 billion by betting on rising prices while energy prices plummeted 12%, whereupon Amaranth Advisors itself faced extremely serious problems as the loss of more than half of its US $ fixed assets 9 billion. In order to produce such high losses at all, Hunter had to borrow around eight dollars for every dollar of equity. Hunter tried to reduce the loss and was not immediately relieved of his duties by Arora. He managed to reduce the loss from US $ 5 billion to US $ 4.5 billion.

Ultimately, the loss of US $ 4.5 billion did not affect Hunter much, because according to the statement of the magazine Focus 09/2007 he was always able to keep his bonuses, which in a good year already amounted to US $ 100 million.

Amaranth Advisors is now regulated by the US SEC and has successfully sold its energy businesses to JP Morgan Chase and Citadel Investment Group . Some funds of funds from Credit Suisse , Morgan Stanley and Deutsche Bank are invested with Amaranth Advisors. So far (September 2006) it is unknown how high the losses of these banks are at Amaranth Advisors. The case of Brian Hunter is reminiscent of that of Nick Leeson , who with his speculations in 1995 dragged the British Barings Bank into the abyss.

swell

1. ↑ The man who gambled away billions
2. ^ Being Brian Hunter ( Memento from January 28, 2008 in the Internet Archive )
3. ↑ ^{a b} How giant bets on natural gas sank brash hedge-fund trader ( Memento from January 15, 2007 in the Internet Archive )
4. ↑ ^{a b} Hedge Funds - "Nothing for Mum and Dad"