Peloton runs out of road

A hedge fund is unsaddled by subprime troubles. It may not be the last

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AFTER hubris comes nemesis. On January 24th more than 1,000 leading figures in the European hedge-fund industry gathered for a dinner at the swanky Grosvenor House hotel on London’s Park Lane to witness the EuroHedge awards for 2007. Out of the 20 awards, two—credit fund of the year and new fund of the year (for non-equity strategies)—were awarded to Peloton Partners, a credit manager set up by ex-Goldman Sachs employees in 2005.

But Peloton (the word is related to platoon and refers to the pack of riders in a cycle race) had already hit a sizeable pothole.

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The sorry saga illustrates two problems. The first is that those who live by leverage can die by it too.

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