Shares in HFA Asset Management soared yesterday on the back of an earnings upgrade and news that it had shorted the sub-prime sector just before the crisis.
Shares in the Australian Securities Exchange (ASX) listed hedge fund leaped 5 per cent to $1.89 yesterday.
The shares are up almost 15 per cent since August 15 when they hit an all time low of $1.65.
The firm issued a statement to the ASX on Friday saying it had anticipated the sub-prime crisis and that its investors would be "well rewarded" by the recent turn of events.
"The US sub-prime collapse comes as no surprise to HFA," the statement said.
"Investors and advisers who have attended any of our investment briefings over the past two years will be well aware that HFA's chief investment strategist, Jonathan Pain has been warning of the imminent collapse of the sub-prime market for some time."
HFA said its exposure to US sub-prime, through both collateralised debt obligations and Residential Mortgage Backed Securities, was a net short position.
The hedge fund upgraded its net profit forecast to $20.3 million, up 7 per cent on the July forecast of $19 million.
HFA's results are due on August 27.
Fellow Australian hedge fund Basis Capital Fund Management announced last week one of its funds had lost more than 80 per cent of its value due to the collapse of the US sub-prime mortgage market.
