Two Bear funds on verge of breakdown

Two Bear Stearns hedge funds that invested heavily in securities backed by subprime mortgage loans are close to being shut down.
JUN 20, 2007
By  Bloomberg
Two Bear Stearns hedge funds that invested heavily in securities backed by subprime mortgage loans are close to being shut down. Merrill Lynch & Co., one of the fund's lenders, have seized $800 million of assets from troubled hedge funds managed by Bear Stearns, sources familiar with the situation said told Reuters today. The assets of the High Grade Structured Credit Strategies Enhanced Leverage Fund and the High Grade Structured Credit Strategies Fund are expected to be sold off later today, and are mainly collateralized debt obligations supported by asset-backed securities, said dealers that had seen the list of securities up for sale, according to Reuters. At the same time, the funds' managers is working with several other lenders, including New York-based Goldman Sachs Group Inc. and Charlotte, N.C.-based Bank of America Corp., to pay off the funds' $9 billion in loans, according to The Wall Street Journal. The struggling High-Grade Structured Credit Strategies Enhanced Leverage Fund has suffered from 23% losses through April, due to woes in the subprime mortgage industry and faced demands from creditors to post additional collateral. Late last week, the fund sold off at least $4 billion of mortgage securities, to help pay for client redemptions and expected margin calls (InvestmentNews, June 19).

Latest News

Integrated Partners, Kestra welcome multigenerational advisor teams
Integrated Partners, Kestra welcome multigenerational advisor teams

Integrated Partners is adding a mother-son tandem to its network in Missouri as Kestra onboards a father-son advisor duo from UBS.

Trump not planning to fire Powell, market tension eases
Trump not planning to fire Powell, market tension eases

Futures indicate stocks will build on Tuesday's rally.

From stocks and economy to their own finances, consumers are getting gloomier
From stocks and economy to their own finances, consumers are getting gloomier

Cost of living still tops concerns about negative impacts on personal finances

Women share investing strengths, asset preferences in new study
Women share investing strengths, asset preferences in new study

Financial advisors remain vital allies even as DIY investing grows

Trump vows to 'be nice' to China, slash tariffs
Trump vows to 'be nice' to China, slash tariffs

A trade deal would mean significant cut in tariffs but 'it wont be zero'.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.