Amaranth disclosed this week that it lost $4 billion betting the wrong way on gas prices and industry experts have questioned its future survival.
Analysts say a sharp fall in natural gas prices instigated the losses, but Amaranth has made large profits in the past on the natural gas market.
Now Man Alternative Investments, one of Man Group's hedge funds, has revealed it held one of Amaranth's hedge funds in its portfolio, constituting 35 per cent of its assets as of the end of last month.
But the Times reports Man saying: "It is not possible at this stage to calculate precisely the effect which the losses sustained by Amaranth will have on the company's net asset value going forward."
The Man disclosure and Amaranth revelation highlights the instability affecting the hedge fund world following Amaranth's revelation this week. The hedge fund did not anticipate easing natural gas supply concerns and optimistic seasonal weather forecasts, which led to a drop in prices.