|Marathon Asset Management LP came up on the winning side of its bet that a plan backed by Bill Ackman of Pershing Square Capital Management to revive troubled retailer, J.C. Penny Co. would fall short. According to Bloomberg News, Marathon Asset Management, a $10 billion credit hedge fund, began accumulating five-year credit-default swaps on J.C. Penny Co. early in 2012 that have since been sold for significant gains. |
Bill Ackman has accumulated an 18 percent position in J.C. Penny’s stock and has backed a plan by CEO Ron Johnson to turnaround declining sales; however, the derivative trades of Marathon Asset Management LP may have exacerbated J.C. Penny’s credit risk. The retailer’s shares fell 3 percent when the credit-default swap trades were announced.