Magnetar Capital
Magnetar Capital is a hedge fund based in Evanston, Illinois. The firm was founded in 2005 and invests in fixed-income, energy, quantitative, and event-driven strategies. The firm was actively involved in the collateralized debt obligation (CDO) market during the 2006–2007 period. In some articles critical of Magnetar Capital, the firm's arbitrage strategy for CDOs is described as the "Magnetar trade".
| Company type | Limited liability company |
|---|---|
| Industry | Hedge fund |
| Founded | 2005 |
| Founders |
|
| Headquarters | Evanston, Illinois |
Key people | |
| Services | Investment management |
| AUM | US$13.8 billion (2022) |
Number of employees | 260 |
| Website | www |
The company has additional offices in New York City, London, Houston, and Minneapolis.
In 2006–2007, Magnetar Capital "facilitated the creation of a few of the worst-performing collateralized debt obligations", many named after stars or constellations. While the CDOs Magnetar Capital helped create led to losses on Wall Street, the company profited as a result of its hedged investment strategy; Magnetar Capital had protected itself against losses on CDOs by purchasing credit default swaps. As of 2010, 23 of the CDOs in which Magnetar Capital invested had become "nearly worthless". Despite investigations by the U.S. Securities and Exchange Commission into several deals in which Magnetar Capital invested, no enforcement action was taken against the firm.