Bear Stearns rescues hedge fund

Bear Stearns will chip in up to $3.2 billion to help one of its struggling hedge funds
JUN 22, 2007
The Bear Stearns Co. Inc. today said it would chip in up to $3.2 billion to help a struggling hedge fund that it manages. The Bear Stearns High Grade Structured Credit Fund will get the money it needs to replace secured financing, reduce creditors' leverage and improve liquidity. The cash will also help eliminate exposure that banks, such as Citigroup and Barclays, had to the fund, a source told Reuters. Just yesterday, Merrill Lynch and Co. Inc. stepped away from its threat to drop $850 million in securities from Bear Stearns' hedge funds. Instead, the firm sold $100 million of its collateralized debt obligations, holding on to the rest of the securities in the meantime. "That uncertainty in the marketplace surrounding these funds has made an orderly de-leveraging difficult," said Bears Stearns chairman and CEO James E. Cayne, in a statement. "By providing the facility we believe we will stabilize financing, reduce uncertainty in the marketplace and allow for an orderly process to de-leverage the High Grade Fund." Recently, Wall Street creditors, such as JPMorgan Chase & Co. and Lehman Brothers Holdings Inc., have been putting their collateral on sale. Bear Stearns is still working a deal to help a second troubled hedge fund, High Grade Structured Credit Strategies Enhanced Leverage Fund, according to Reuters.

Latest News

Envestnet agrees to buy Vestmark, adding institutional trading muscle
Envestnet agrees to buy Vestmark, adding institutional trading muscle

The deal gives Envestnet institutional-grade trading and tax technology alongside Vestmark's advisory client base

Savvy Wealth lands $100M to scale AI agents for advisors
Savvy Wealth lands $100M to scale AI agents for advisors

The AI-driven RIA has doubled its advisor base to over 150 this year and is on pace to top $100M in annual recurring revenue

Orion expands advisor trading, keeps oversight with firms
Orion expands advisor trading, keeps oversight with firms

New trading tools let advisors execute and rebalance client portfolios directly, while firms retain permission-based control.

Edelman Financial Engines brings fiduciary advice to small business plans
Edelman Financial Engines brings fiduciary advice to small business plans

New ADP-delivered solution gives small and mid-size businesses access to 3(38) fiduciary oversight and participant-level advice for one fee.

Hightower Signature Wealth adds $1.6B Boston-area firm
Hightower Signature Wealth adds $1.6B Boston-area firm

Boston Hill Advisors joins Hightower's national platform as the mega-RIA's latest Massachusetts move drives HTSW closer to its $50 billion target for 2026.

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income