Bear Stearns has got its shovel out and digging away in its subprime hole.
Bear Stearns Private Equity Limited, a LSE listed investment company, on Wednesday put out a long statement to shareholders, setting out its stall in the wake of the hedge fund woes in the US.
The bank itself late on Tuesday night had given an update on the structured credit affair, confirming that thanks to collateral sales last week, the financing needed to plug the hole in the High-Grade Structure Credit Fund would only be $1.6bn, rather than the $3.2bn originally announced.
Work continues on the other fund to hit trouble, the High-Grade Structured Credit Enhanced Leverage Fund, “to facilitate an orderly de-leveraging of the fund in the marketplace,” it added.
But BSPEL felt the need to add its own brand of reassurance. It is well capitalised, it said. It is well diversified. It has no subprime exposure. It has no investments in Bear Stearns funds. And it added, somewhat perplexingly:
Bear Stearns\\’ franchise is sound. Since its founding in 1923, Bear Stearns has weathered many market ups and downs, the current situation included. The Company remains proud of its history of more than 80 years of profitability and the franchise is sound.
It then goes on to lay out some of its recent highlights, the rapid deployment of its capital, robust pipeline, investment focus outside the US and so on.
But amid the fallout in the US, hands up if you remembered that Bear had a listed private equity fund here in London - with a market value, admittedly after recent falls, of a whopping $485mm. We certainly didn’t.
Why they wanted to issue a statement, even after a “number of enquiries from shareholders”, to draw attention to themselves is anybody’s guess?
