its gonna be bloody in the morning
The Wall Street Journal reports BSC already forced to shut two hedge funds that bet heavily on the risky subprime-mortgage market, is now facing big losses in a third fund that has roughly $900 mln in mortgage investments, according to people familiar with the matter. The fund, known as the Bear Stearns Asset-Backed Securities Fund, ran into trouble in July and has refused to return investors' money for the moment, according to these people. One of these people said the redemption requests were postponed in hopes that the fund's assets would rebound in value. The fund contains a range of mortgages, but only a small slice of them that are considered subprime, the area that has given so many firms heartburn in recent weeks. Unlike the two other Bear funds that are being closed, this fund is not leveraged. The asset-backed fund was up about 5% between the beginning of the year and the end of June according to these people. But faced with a slew of mortgage markdowns in July, its performance appears to have plummeted. It is not known how much, if anything, BSCns of the fund... The decline of the asset-backed fund is yet another setback for Bear's embattled money-management unit, Bear Stearns Asset Management. The weakening and eventual failure of two structured credit funds in June and July, known as the High-Grade Structured Credit Strategies Fund and the High-Grade Structured Credit Strategies Enhanced Leverage Fund, lost investors as much as $1.6 billion in equity and forced the ouster of the unit's chairman. "There are no plans to shut down the fund," said Russell Sherman, a Bear spokesman. "We believe the fund portfolio is well positioned to wait out the market uncertainty. And we believe by suspending redemptions, we can ensure the best long term results for our investors. We don't believe it's prudent or in the interest of our investors to sell assets in this current market environment."
18:47 BSC Bear Stearns has halted redemptions on a third hedge fund - Bloomberg -Update-
The Wall Street Journal reports BSC already forced to shut two hedge funds that bet heavily on the risky subprime-mortgage market, is now facing big losses in a third fund that has roughly $900 mln in mortgage investments, according to people familiar with the matter. The fund, known as the Bear Stearns Asset-Backed Securities Fund, ran into trouble in July and has refused to return investors' money for the moment, according to these people. One of these people said the redemption requests were postponed in hopes that the fund's assets would rebound in value. The fund contains a range of mortgages, but only a small slice of them that are considered subprime, the area that has given so many firms heartburn in recent weeks. Unlike the two other Bear funds that are being closed, this fund is not leveraged. The asset-backed fund was up about 5% between the beginning of the year and the end of June according to these people. But faced with a slew of mortgage markdowns in July, its performance appears to have plummeted. It is not known how much, if anything, BSCns of the fund... The decline of the asset-backed fund is yet another setback for Bear's embattled money-management unit, Bear Stearns Asset Management. The weakening and eventual failure of two structured credit funds in June and July, known as the High-Grade Structured Credit Strategies Fund and the High-Grade Structured Credit Strategies Enhanced Leverage Fund, lost investors as much as $1.6 billion in equity and forced the ouster of the unit's chairman. "There are no plans to shut down the fund," said Russell Sherman, a Bear spokesman. "We believe the fund portfolio is well positioned to wait out the market uncertainty. And we believe by suspending redemptions, we can ensure the best long term results for our investors. We don't believe it's prudent or in the interest of our investors to sell assets in this current market environment."
18:47 BSC Bear Stearns has halted redemptions on a third hedge fund - Bloomberg -Update-
