FORTUNE -- The line between "portfolio manager" and "trader" has blurred, and in 2011 that was a good thing. Many current managers started their careers as traders, and in the past year -- as both commodities and stocks showed stomach-churning volatility -- the ability to get into and out of positions quickly has been crucial. Traders operate behind the scenes, but we found four who have the respect of their peers, including two who now run their own funds. --Daniel Roberts
Mudrick Capital Management
Harvard Law grad Mudrick was previously at Contrarian Capital Management, where he traded distressed equities. He launched his own fund -- small, it currently has $200 million under management -- in 2009, and it's done well so far. Mudrick bought a large stake in CIT (CIT) debt, which rallied from Chapter 11 and generated a 200% return for the fund. This year he traded into SuperMedia (SPMD), an advertising company formerly called Idearc, which came out of bankruptcy in 2010 and made him a 50% return. Sources say Mudrick Capital is flat year-to-date, during a brutal year for most funds.
Saba Capital Management
Former Deutsche Bank trader Narayanan runs the London office for Boaz Weinstein's $4.7 billion Saba Capital and focuses on trading European credit. "Since he joined, the firm has become much more active in the European markets," says Weinstein. Narayanan's insights (most recently, he established a highly profitable yield-curve trade in Italian banks) helped Saba outperform the industry. The fund is up 9% YTD.
DOWN, NOT OUT
Hutchin Hill Capital
The $2 billion fund is down 3%, mostly because of large equity positions. But its great returns from 2008 to 2010 were thanks in part to Ahmad, the fund's exceptional credit trader, who in 2011 had to navigate the volatility in Europe. A source close to Hutchin Hill says Ahmad is "a trader I liken to [SAC's] Steve Cohen in terms of talent. He's fast and registers changes quickly. His P&L is hundreds of small wins." Some of those wins this year were trades in credit and macro strategy.
Pia Capital Management
Commodities trader Pia used to manage $1.3 billion at Louis Bacon's Moore Capital, but he launched his own fund and has maintained his focus on metals. Pia is bullish on gold, and in March he correctly predicted it would hit $1,900 an ounce by September. Pia Capital is down 14% this year because sector stock picks like Stillwater Mining (SWC) lagged, but this is its first down year. For 2012, Pia plans to scale back his equities trading and return to commodities.
UNDERSTATEMENT OF THE YEAR
Adoboli, who allegedly made unauthorized trades and faked documents at UBS (UBS), called his actions "disastrous miscalculations." Ya think? They cost the bank $2.5 billion, contributed to the ouster of CEO Oswald Gruebel, and put Adoboli on the list of rogue trader all-stars.
The best and worst of Wall Street 2011
This article is from the December 26, 2011 issue of Fortune.
FORTUNE -- The outlook for the global economy got a bearish blast of cold air from the Great White North. --Alex Konrad
David Rosenberg Gluskin Sheff
The worse things get, the more accurate David Rosenberg looks. The longtime bear decamped from Merrill Lynch following the Bank of America (BAC) takeover and returned to his home city of Toronto, where he became chief economist at Gluskin Sheff. Since then he has consistently nailed his economic MOREDec 12, 2011 5:00 AM ET
FORTUNE -- Bigger was not always better when it came to picking stocks this year. Meanwhile, banking's loneliest defender soldiered on. --Alex Konrad
Donna Jaegers D.A. Davidson
Small is beautiful. In a year in which a lot of well-known analysts got crunched, the best-performing was Donna Jaegers, who works at a tiny firm (D.A. Davidson in Denver) and picked small-caps in her sector, telecom. Fortune asked Zacks Research to rank analysts in eight sectors MOREDec 12, 2011 5:00 AM ET
FORTUNE -- Experience wins out. It was supposed to be a rebound year for M&A, but the soft global economy, euro fears, and antitrust issues put a lot of deals on ice. Two sectors -- energy and technology -- picked up steam, though, and a few dealmakers stood out. --Anne VanderMey
Hugh "Skip" McGee III Head of global investment banking, Barclays Capital
A Texan who has worked in energy M&A for 24 years, MOREDec 12, 2011 5:00 AM ET
A look back at the highs and lows of the past year in the financial markets.
FORTUNE -- To borrow from the 1978 camp classic, "Greece" is the word. Looking back at 2011, the European debt crisis -- particularly Europe's protracted will-they-or-won't-they debate over coming to the aid of their Greco-roamin' common currency partners -- was probably the single biggest factor to impact the financial markets. As if that weren't enough, MOREDec 12, 2011 5:00 AM ET
FORTUNE -- In the turbulence of 2011, boring was beautiful for mutual funds. Riskier funds that owned shares of banks and emerging-markets companies got crushed, while safe, plain-vanilla portfolios focusing on utilities, health care, and consumer staples shone. And the top performers owned Treasuries; as investors fled risky sovereign debt, funds that held long-term bonds from the U.S. government returned 28% on average.
Among major fund companies, the top performer was MOREDec 12, 2011 5:00 AM ET
FORTUNE -- The past year was harvest time in the private capital markets, as venture capital and buyout firms looked to sell long-held portfolio holdings or take them public. In addition to huge IPOs for HCA (HCA), LinkedIn (LNKD), and Groupon (GRPN), there were a few big surprise deals, like Microsoft's (MSFT) acquisition of Skype. Blackstone also had a good year And it was a time of stratification, in MOREDec 12, 2011 5:00 AM ET
FORTUNE -- It's been a brutal year for hedge funds, and some former stars are stepping down. The super-secretive Bruce Kovner is retiring after 28 years atop $10 billion Caxton Associates; billionaires George Soros and Carl Icahn are returning outsiders' money; and the once-exalted Goldman Sachs (GS) Global Alpha fund was shuttered this fall. "It's a changing of the guard," says Emma Sugarman, global head of capital introductions at BNP MOREDec 12, 2011 5:00 AM ET
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