Subprime meltdown hits Bear Stearns hedge fund

Just when it seemed like Wall Street's top firms had weathered the subprime storm comes news that Bear Stearns' High-Grade Structured Credit Strategies Enhanced Leverage Fund sank 23 percent as of the end of April 30. According to BusinessWeek Bear Stearns' asset management group has suspended redemptions which has investors upset (to say the least). One apparently has been trying in vain to get his money back since February. The fund got caught on the losing end of a big bet on subprime mortgages. In a June 7 letter, Bear Stearns explained that redemptions were not possible because the "company will not have sufficient liquid assets to pay investors." Ouch! Some $250 million in assets were attempting to flee. It's Hail Mary time for the fund. It still has about $500 million, so a lucky run might be enough to put all this under the bridge.

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