Thursday, July 19, 2007

Basis Capital Suffered Subprime Losses as Early as February, Letter Says

(Bloomberg) -- Basis Capital Fund Management Ltd.,
an Australian hedge fund caught up in the rout in U.S. subprime
mortgages, suffered losses as early as February.

In a letter sent to investors July 6, Basis Capital said its
investments in collateralized debt obligations, or CDOs, had been
tarnished by ``guilt by association.'' Less than a week later,
the Sydney-based hedge fund, which had assets of $1 billion in
May, said its two funds lost 9 percent and 14 percent last month.
Withdrawals from the funds have been frozen and some margin calls
have been missed, research firm Zenith Investment Partners Ltd.
said in an e-mailed note today.


Read more at Bloomberg Bonds News

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