UBS fixed-income exit highlights difficulties of unwinding

Preparing to unwind

cog-in-cloud

"Derivatives businesses are like hell: easy to enter and almost impossible to exit," Warren Buffett said in 2002, as Berkshire Hathaway tried to get rid of the Gen Re Securities derivatives portfolio it acquired as part of a bigger deal in 1998. That portfolio contained 23,128 contracts with more than 600 counterparties. It took nearly five years to exit the bulk of the portfolio, costing Berkshire more than $400 million, but even today there are still some live trades on the books.

For Buffett,

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: