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HENRY SWIECA VIVIDLY REMEMBERS THE FIRST TIME HE met Glenn Dubin, his partner in Highbridge Capital Management, the New York City hedge fund firm. It was in 1960 in a Bennett Park sandbox at West 183rd Street and Fort Washington Avenue in the northernmost reaches of Manhattan.

"We shared peanut-butter-and-banana sandwiches," recalls the 47-year-old Swieca, with a grin. Dubin, also 47, just laughs, saying, "His memory is much better than mine."

The two grew up in Washington Heights, a working-class neighborhood in the shadow of the George Washington Bridge. All through their school years, they remained fast friends. Swieca attended a private school on the Upper West Side -- the Franklin School (now merged with the Dwight School) -- on a scholarship, whileDubin starred in football and wrestling at John F. Kennedy High School in Riverdale in the Bronx. But the friends, who lived just five blocks apart, would often spend hours on the phone in the evenings, with Dubin, the jokester, invariably cracking up his buddy.

The pair roomed together during their freshman and sophomore years at the State University of New York at Stony Brook. And it was at the leafy Long Island school that Swieca and Dubin teamed up for their first business venture: taking over the chocolate-distribution business of Dubin's deceased grandfather. They earned a fair amount, but, Swieca concedes, "We ate too much chocolate."

The two pals still have a taste for sweets. As founding partners of Highbridge Capital Corp., a $6 billion hedge fund, they earn tens of millions a year, counting their take from the firm's lucrative 25 percent performance fee and the gains on their large stake in the fund. That's not to mention the not inconsiderable proceeds from their other business, Dubin & Swieca Capital Management, which runs a pair of funds of hedge funds, Overlook Performance Fund and Pinehurst Partners, with a combined $1 billion in assets.

The clients of Highbridge Capital have also done rather handsomely -- and with remarkable consistency. Highbridge's returns, net of all fees, from the time the fund was launched in September 1992 through April 2004, average more than 16 percent a year, or about 50 percent better than the Standard & Poor's 500 index over the same period -- with a lot less risk (see chart, page 76). Highbridge has posted gains in an astounding 127 of 140 months since its inception, and the fund's standard deviation of 5 percent indicates that it's one third as volatile as the S&P. Moreover, Highbridge's Sharpe ratio -- its incremental return over the risk-free Treasury bond rate -- is 2.17, or more than four times that of the S&P 500 (see table, page 76).