Bear To Liquidate Hedge Fund Burned By Subprime Slide

Jun 14 2007 | 12:42pm ET

The crisis in the subprime mortgage market has claimed a second hedge fund victim, as Bear Stearns is liquidating its 10-month-old High-Grade Structured Credit Strategies Enhanced Leverage Fund. Bear sought bids—due at 10 a.m. this morning, The Wall Street Journal reports—for some $3.8 billion in mortgage-backed securities after it was forced to halt redemptions in the fund, which is down about 20% this year. Investors were seeking to pull almost half of their $600 million by June 30.

Bear is seeking to sell the fund’s highest-rated bonds in the current sale. In September, it unloaded its highest-risk collateralized debt obligations on Everquest Financial. Calls made to the firm were not returned by press time.

Bear is the second major investment bank to see a hedge fund burned by the spike in delinquencies. Last month, UBS shuttered its year-old hedge fund Dillon Read Capital Management, which also suffered big losses in the subprime mortgage market.


In Depth

An Interview With Harvest Volatility Management's Rick Selvala

Mar 23 2017 | 5:39pm ET

Several years of extremely low interest rates have pushed some investors into equities...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

SEI: Private Debt Coming Into Its Own

Mar 8 2017 | 9:24pm ET

The explosive growth of private debt over the past few years has caused the lines...