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Goldfinger

Hedge Fund Implode - O - Meter

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Since the two Bear Stearns hedge funds have gotten into trouble, the financial systems seems to show more and more cracks

in the form of highly leveraged hedge funds that seem to have been betting on the wrong side of CDOs, MBSs and other

weapons of financial mass destruction. We should follow this process, since it is a sign of coming trouble and also a good

barometer for general credit tightening and fallout from the housing/mortgage-debacle. I suggest therefore to keep loosely

track of what is going on in the sector by maintaining a list of funds in trouble. I make a start here. I would propose to

post information in the following form (fund in alphabetical order):

Fund's name (or institution who runs it) -- assets

kind of investments

kind of trouble they're in; reported losses (if any)

link(s) to relevant news

----------------------------------------------

Since June 2007, 9 funds have gotten into trouble:

Bear Stearns High- Grade Structured Credit Fund

Bear Stearns High-Grade Structured Credit Enhanced Leveraged Fund

CDOs

rescue efforts

http://www.bloomberg.com/apps/news?pid=new...id=ahWfhEJ7dra4

http://www.bloomberg.com/apps/news?pid=new...id=a2.uCdsyYHtE

Caliber Global Investment Ltd. -- $908 million

(Cambridge Place Investment Management LLP)

mortgage fund

closes down (losses)

http://www.bloomberg.com/apps/news?pid=206...amp;refer=funds

Fund by Carlyle Group

MBSs

IPO postponed; downsized

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Dillon Read Capital Management LLC

(UBS)

equities, mortgages

losses: $122 million in Q1 2007

http://www.bloomberg.com/apps/news?pid=new...id=aV.uoldRoQGU

Lake Shore Asset Management Ltd. -- $466 million

commodities fund

assets frozen; overstated holdings

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Queen's Walk Investment Ltd.

(Cheyne Capital Management Ltd.)

mortgage fund

losses $91 million

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Ritchie Risk-Linked Strategies Trading (Ireland) Ltd.

Ritchie Risk-Linked Strategies Trading (Ireland) Ltd. II

life insurance investments

filed for bankruptcy; losses $700 million

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Edited by Goldfinger

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Ooh thats good, why dont you draw up a list of the "x" largest as well. Then you can do the implode-ometer red and blue strike throughs for bankruptcy, or take over. :)

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Ooh thats good, why dont you draw up a list of the "x" largest as well. Then you can do the implode-ometer red and blue strike throughs for bankruptcy, or take over. :)

I'll think about it.

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Welcome to the Hedge Fund Implode-O-Meter

Update -- 10 funds so far. New funds are posted in bigger fonts at the beginning.

-----------------------------------------------------------------------------------------------

Since June 2007, 10 funds have gotten into trouble:

Bear Stearns High- Grade Structured Credit Fund

Bear Stearns High-Grade Structured Credit Enhanced Leveraged Fund

CDOs

rescue efforts

http://www.bloomberg.com/apps/news?pid=new...id=ahWfhEJ7dra4

http://www.bloomberg.com/apps/news?pid=new...id=a2.uCdsyYHtE

Caliber Global Investment Ltd. -- $908 million

(Cambridge Place Investment Management LLP)

mortgage fund

closes down (losses)

http://www.bloomberg.com/apps/news?pid=206...amp;refer=funds

Fund by Carlyle Group

MBSs

IPO postponed; downsized

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Dillon Read Capital Management LLC

(UBS)

equities, mortgages

losses: $122 million in Q1 2007

http://www.bloomberg.com/apps/news?pid=new...id=aV.uoldRoQGU

Horizon ABS Fund LP

(United Capital Markets Holdings Inc. -- $619 million)

subprime- mortgage bonds

restricted redemptions because of "unusually high number of redemption requests"

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Lake Shore Asset Management Ltd. -- $466 million

commodities fund

assets frozen; overstated holdings

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Queen's Walk Investment Ltd.

(Cheyne Capital Management Ltd.)

mortgage fund

losses $91 million

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Ritchie Risk-Linked Strategies Trading (Ireland) Ltd.

Ritchie Risk-Linked Strategies Trading (Ireland) Ltd. II

life insurance investments

filed for bankruptcy; losses $700 million

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Edited by Goldfinger

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Great endeavor - thanks for putting this list together. Hope you can keep it updated! ;)

How long before we see the Private Equity Deal Implode - O - Meter?

Edited by DrBob

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Here's a little piece that has a look at who might be next and analyses why BS were the first to go.

Investment Landfill - Is your pension fund a dump for toxic waste?

http://goldnews.bullionvault.com/files/Inv...nt_Landfill.pdf

So Bear Stearns went from nowhere (lower than 25th) to 13th in 1 year. Duke Funding LLC seems to have gone from 17th to 3rd in the same time, with USD10bn of liabilities. Perhaps we should keep our eyes on that one too?

Edited by Warwick-Watcher

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So Bear Stearns went from nowhere (lower than 25th) to 13th in 1 year. Duke Funding LLC seems to have gone from 17th to 3rd in the same time, with USD10bn of liabilities. Perhaps we should keep our eyes on that one too?

Sticks out liek a sore thumb doesn't it?

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Lake Shore Asset Management Ltd. -- $466 million

commodities fund

assets frozen; overstated holdings

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Just a month ago i put 100k into this. I am rather peed off to say the least.

The only reason i put money in was because i needed to try and keep pace with this bloody housing market and it seemed reasonably non correlated with the stock market.

Aaagh!

You just can't win.

Edited by depaulo

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Here's a little piece that has a look at who might be next and analyses why BS were the first to go.

Investment Landfill - Is your pension fund a dump for toxic waste?

http://goldnews.bullionvault.com/files/Inv...nt_Landfill.pdf

That piece was unbelievable.

One of the funds was leveraged 15 times !!!

Does that mean there are 15 other funds dependant on it's paper valuation?

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Since the two Bear Stearns hedge funds have gotten into trouble, the financial systems seems to show more and more cracks

in the form of highly leveraged hedge funds that seem to have been betting on the wrong side of CDOs, MBSs and other

weapons of financial mass destruction. We should follow this process, since it is a sign of coming trouble and also a good

barometer for general credit tightening and fallout from the housing/mortgage-debacle. I suggest therefore to keep loosely

track of what is going on in the sector by maintaining a list of funds in trouble. I make a start here. I would propose to

post information in the following form (fund in alphabetical order):

Fund's name (or institution who runs it) -- assets

kind of investments

kind of trouble they're in; reported losses (if any)

link(s) to relevant news

----------------------------------------------

.....

An interesting point I am sure. However would it be more balanced to compare against the number of hedged funds started over the previous 5 years, say, and how also how many closed during the same period?

Also, whilst I agree the shadow of subprime will be with us for the medium term, I think one has to keep in mind the money made by hedge funds in the past few years of this macro bull market.

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An interesting point I am sure. However would it be more balanced to compare against the number of hedged funds started over the previous 5 years, say, and how also how many closed during the same period?

Also, whilst I agree the shadow of subprime will be with us for the medium term, I think one has to keep in mind the money made by hedge funds in the past few years of this macro bull market.

Thanks! Have updated.

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Thanks for all the comments. I agree that the reporting is not very balanced in the sense that there is not much perspective

given in terms of overall number of funds, what they made in profits so far, etc. I guess we're all busy people, but if all of

us gather some info and post it here, we can at least keep loosely track of what is going on. It's great that the Duke of

Hazzard brings a little more structure into it on his webpage. GF

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Some background on what went wrong at (and who is that person Cioffi behind) the Bear Stearns funds:

http://www.bloomberg.com/apps/news?pid=206...&refer=home

In a community where you're only as good as your last trade, Cioffi's sudden misfortune won't get a lot of sympathy, said AllianceBernstein's Foster. ``A few bad bets and there you go. This is the name of the game unfortunately.''

A few bad bets? It is just a game of numbers for the fund managers. The problem is of course they are dealing with real peoples money and pensions.

Shylocks the lot of them.

Good thread GF.

F

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