Perella Weinberg Partners' Xerion hedge fund posted a 24 percent gain this year by investing in distressed companies and wagering that the debt of financial- services firms would fall, according to an investors' letter.
The $837 million fund has outperformed competitors, which lost 1.6 percent on average in the first half of 2008, data compiled by Chicago-based Hedge Fund Research Inc. show. Xerion trades the debt of firms with investment-grade ratings and the shares and debt of troubled companies.
There will be more chances to invest in companies going into or emerging from bankruptcy because of increasing losses at Wall Street banks and a slowing U.S. economy, wrote Daniel Arbess, 47, New York-based Xerion's founder and a Perella partner. Lending opportunities will also rise.
