What the US can learn from Queen's Walk

Much of the financial media's focus this week was on Goldman Sachs, US hedge fund Paulson & Co, the SEC, and problems with complex mortgage-related instruments.

It ignored the fact one London-based hedge fund is tackling its own problems with debt instruments very effectively. The Queen's Walk investment trust, run by hedge fund Cheyne Capital Management, has recouped £475,000 from companies it claimed mis-sold its loans linked to mortgages. It has done this by encouraging – ‘forcing’ might be a better description – those who gave false representations or warranties about the instruments to buy them back. In February it succeeded in selling back loans linked to Portuguese properties, comprising 8.5% of its assets. Stuart Fiertz...