Following its first losing year in two decades, Richard Perry’s $7 billion Perry Capital has nearly recouped all of its 2008 losses. The flagship multistrategy fund, Perry Partners International, gained 25.2% in 2009 after plummeting 26.8% in 2008. The firm attributes last year’s performance to clever credit investments, which powered the majority of its gains. In a February 1 letter to investors, Perry warned that the price of 2009’s economic resurgence might be a 2010 retreat. “This has been a nice party,” said the letter. “We hope the hangover is mild.”
While the markets in 2009 benefited from a...