Reuters

Congress recently earmarked $350 billion to help small businesses navigate the novel coronavirus pandemic and cover payroll, rent, and other costs.

Some hedge funds have applied for the government bailouts, according to Bloomberg.

"It's a complete abomination," Nate Koppikar of Orso Partners told the news outlet.

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US lawmakers recently earmarked $350 billion to help small businesses cover payroll, rent, and other costs during the novel coronavirus pandemic. Some hedge funds have applied for the assistance, according to Bloomberg.

"It's a complete abomination," Nate Koppikar, a partner at hedge fund Orso Partners, told the news outlet.

Hedge funds' low headcounts could mean they're eligible for the government loans, which can become grants if recipients keep on or rehire workers.

Read more: MORGAN STANLEY: Investors have a rare opportunity to make low-risk profits in 2020. Here's a 3-part strategy for pulling it off.

However, the investment firms can operate remotely and don't rely on physical footfall, unlike the bars, restaurants, theaters, hairdressers, and other small businesses that have been forced to close by the coronavirus outbreak.

Moreover, many of the funds specialize in hedging their portfolios to minimize losses, and some made huge gains during the recent sell-off. There's no suggestion that the following are applying for a government bailout, but they serve as examples of funds that successfully hedged the downturn:

Billionaire Bill Ackman's Pershing Square turned $27 million into $2.6 billion by buying credit default swaps, insuring itself against asset defaults and offsetting losses in its equity portfolio. Pershing Square told Business Insider that it is not applying for assistance.

London-based Ruffer also made a $2.6 billion gain that offset its losses elsewhere. The fund nicknamed "50 Cent" bet on volatility and hedged against credit, equity, and gold-price declines.

Meanwhile, Universa Investments — a "black swan" fund that buys options which pay off only when markets move dramatically — made a 4,144% return last quarter.

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Hedge funds aren't ruling out applying for loans

Donald Motschwiller — the boss of First New York, a hedge fund that manages $2.9 billion in assets — told Bloomberg that he remained undecided on whether to file a claim for government aid. He polled more than a dozen hedge funds of varying sizes, and none ruled out taking a loan, he added.

The hedge fund industry's body, the Managed Funds Association, said in a statement to Bloomberg that managers will make their own decisions as to whether they need a loan.

However, it added, "We have provided guidance to our members that we do not believe the money in this program was intended for managers' general partnership interests."

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