Bear Stearns told clients Tuesday that two of its hedge funds were now almost worthless with a letter from chairman and chief executive James Cayne.
“The preliminary estimates show there is effectively no value left for the investors in the Enhanced Leverage Fund and very little value left for the investors in the High-Grade Fund as of June 30, 2007,” Cayne writes in the letter. “In light of these returns, we intend to seek an orderly wind-down of the Funds over time.”
Trouble at the Bear Stearns funds leaked to the public in March, when the investment bank began disclosing the funds had sustained heavy losses from making wrong-way bets in the subprime loan market. But until Tuesday, investors in the fund did not know just how extreme those losses had become.
This morning DealBreaker obtained a copy of Cayne’s letter, the contents of which have already been widely reported.
Download James Cayne's Letter [pdf]
Posted by David Merkel , Jul 19, 2007 10:19AM
My but the closing line, "You can count on us to deliver," rings hollow.
Posted by mt , Jul 19, 2007 11:23AM
Can we cut the Bear coverage to like one article every OTHER day....enough is enough already.
Posted by jt , Jul 19, 2007 11:41AM
the best line is "The risk management function at BSAM has been restructured so that it will now report up to Mike Alix, Bear Stearns’ chief risk officer, creating an additional layer of oversight."
So wait, let me get this straight: prior to this month (week?) risk management in the Asset Management group DIDN'T report to the Chief Risk Officer??????
Gee, its a wonder why these funds tanked in light of this little gem, oy!