The trade that was supposed to carry the year is ruining it instead. Hedge-fund and private-equity managers over the past year began piling into debt issued by troubled energy companies, hoping to profit off a reversal of oil’s slide. They raised billions of dollars for the effort, in many cases telling backers it was a once-in-a-generation chance to pounce. But crude has continued to fall, slamming the companies and many large investors who thought they had bought in near the bottom. An energy fund at Magnetar Capital LLC is down 12% this year through the end of September after the more-than $14 billion hedge-fund firm invested billions of dollars in distressed oil and gas companies, according to investor documents reviewed by The Wall Street Journal. Brigade Capital Management LP’s main hedge fund is having its worst stretch since 2008 in part because of the $16 billion firm’s exposure to […]