By Stephen Taub
Photographs by Michael Edwards
In September 12 of last year, the six members of Highbridge Capital Management's executive committee were gathered at cofounder Glenn Dubin's Rocky Mountain ranch in Colorado, when news of Lehman Brothers' impending bankruptcy reached the group. Cutting weekend plans short, on Sunday, September 14, they packed their bags and flew back to New York City.
"It was war," recalls Dubin, who suddenly faced the biggest crisis in the 16-year history of Highbridge, which had about $27 billion in hedge fund assets as of July 1, 2008. "It was the beginning of the world changing."
Highbridge, headed by Dubin and cofounder Henry Swieca, thought it was prepared. Over the summer of 2008, the firm had deleveraged by selling equities in its flagship multistrategy fund, keeping it flat for the year when the major market indices had already posted double-digit declines.
But the multistrategy firm...