Some of the biggest hedge-fund firms have slumped since September, sideswiped by falling stock and bond markets and a legal decision that sent Fannie Mae and Freddie Mac securities plunging.
Billionaire John Paulson’s namesake firm had some of the biggest declines last month, losing as much as 11 percent in one of its funds. Owl Creek Asset Management LP posted a 3.4 percent decline in the first three days of October driven largely by its Fannie Mae and Freddie Mac stakes, and is down 7.5 percent this year, according to a document seen by Bloomberg News. Claren Road Asset Management LLC lost 5 percent in the first week of October because of its investments in the two U.S.-owned mortgage companies, wiping out gains for 2014.
