GoldenTree Asset Management, the $15.7 billion hedge fund specializing in corporate credit, has hired former Goldman Sachs trader Deeb Salem as the firm expands its mortgage-bond team.

Salem started at New York-based GoldenTree this week, chief investment officer Steven Tananbaum said.

Salem, who left the bank in May, was among the Goldman Sachs traders who handled its bets against subprime mortgages as the debt collapsed in 2007, at one point trying to manipulate prices of derivatives tied to the loans, according to a report last year by a U.S. Senate panel. Salem denied wrongdoing.

Asset managers including Canyon Partners, Brevan Howard Asset Management and D.E. Shaw & Co., known for betting in markets such as real estate, government notes or company debentures, have been wagering on mortgage securities as potential returns narrow elsewhere, accelerating gains in housing debt.

The $1 trillion market for U.S. home-loan bonds without government backing offers "probably the most upside in structured products," though carries more risk than notes such as collateralized loan obligations tied to companies' health, Tananbaum said.

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