Hedge funds are facing pushback in California as their bets tied to insurance claims stemming from the Los Angeles wildfires are attacked as unethical.
The transactions in focus are tied to so-called subrogation claims, which hedge funds, private equity firms and other alternative investment managers have been buying from insurers over the past few months. Subrogation kicks in if a third party such as a utility is suspected of being responsible for losses covered by insurers.
Hedge funds buying these claims from insurers are now under attack from the California Earthquake Authority, which is the