Everyone talks about the Amaranth collapse and all the money lost. Of course, for certain folks at JP Morgan and Citadel, Amaranth represents something else entirely: the day they made lots and lots of money.
JPMorgan, the No. 3 U.S. bank, got a profit boost in the third quarter from the collapse of Amaranth, which unloaded its natural gas portfolio at a discount to the bank and Citadel Investment Group.
Bill Winters, co-chief executive of JPMorgan's investment banking business, said the bank has unique insight into the hedge fund industry because it has broad relationships with firms that have some $1 trillion in assets under management.
"We are not exposed from a credit perspective, materially, which allows us to respond quickly to opportunities when they come up," Winters said at Merrill Lynch's banking and financial services conference in New York.
"Amaranth was one obvious example of that," Winters said. "I imagine there will be others as we go through time where our ability to be on the inside, but not compromised, is extremely powerful."