Amaranth disaster not so disastrous after all

Posted Jan 25th 2007 3:30PM by Tom Taulli
Filed under: JPMorgan Chase (JPM), Goldman Sachs Group (GS)

For 2006, the hedge fund, Amaranth Advisors LLC, was definitely a black eye for the industry -- as well as an indication of the high risks of such investments. That is, back in the summer, the fund imploded as a key trader made a bad bet on the energy market.

Well, according to a report from MarketWatch, it looks like investors may have recovered 55% to 60% of the remaining capital in the fund. Unfortunately, there is still a good amount of illiquid assets that need to be worked-out.

The big beneficiaries from the mess may actually be top Wall Street firms like Goldman Sachs (NYSE:GS) and J.P. Morgan (NYSE:JPM). For example, it looks like J. P. Morgan got a big boost in trading because of its efforts to unwind half the energy portfolio of Amaranth during the fourth quarter.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Tags: Amaranth, Goldman Sachs, GoldmanSachs, Hedge Funds, HedgeFunds, J.P. Morgan, J.p.Morgan