Reuters- Problems in the credit markets coupled with a sharp drop in equity markets have affected many hedge fund returns. As managers in the loosely regulated $1.75 trillion industry total up July numbers, speculation mounts that more funds could be on the brink of shutting down.
Following is a list of firms whose hedge funds have recently posted losses or have been shut down entirely, their location, and a description of their troubles:
— Bear Stearns Cos. (BSC.N: Quote, Profile, Research) (United States) – Two Bear Stearns funds which invest in collateralized debt obligations — bonds comprising repackaged mortgages — by mid-June are trying to sell about $4 billion in bonds to raise cash for redemptions. Major investment banks seize assets or unwind positions. Bear eventually bails out one of the funds and lets the other one fail. In late July, Bear Stearns halts redemptions at a third hedge fund.
— Absolute Capital (Australia) – Half-owned by Dutch bank ABN AMRO (AAH.AS: Quote, Profile, Research). Temporarily closes two funds in late July with a combined A$200 million in assets amid problems with collateralized debt obligations.
