Australian Hedge Fund Absolute Capital Halts Withdrawals After CDO Losses

(Bloomberg) -- Absolute Capital Group Ltd., an
Australian hedge fund that invests in collateralized debt
obligations, suspended withdrawals from two of its funds after
forecasting they may lose as much as 6 percent this month.

The firm froze its Yield Strategies Fund and Yield
Strategies Fund NZD, which together have about A$200 million
($177 million) in investments, according to a statement on its
Web site.


Read more at Bloomberg Bonds News

Bear Stearns Shares Show Cayne's Dummy `Body Blow' Won't Prove Massive

(Bloomberg) -- When Bear Stearns Cos. Chief
Executive Officer James E. ``Jimmy'' Cayne told the New York
Times the failure of the firm's hedge funds was a ``body blow of
massive proportion,'' he may have been using a tactic honed in
three decades of championship bridge.

To win the card game, a player sometimes will misstate the
number of tricks he can win to dupe opponents into
underestimating his hand. So far, Bear Stearns shareholders
aren't showing much anxiety. The stock has outperformed its peers
since Cayne's remarks were published on June 29, even after Bear
Stearns told investors in the High-Grade Structured Credit
Strategies and High-Grade Structured Credit Strategies Enhanced
Leverage funds that almost all of their money was wiped out.


Read more at Bloomberg Stocks News

United Capital's Devaney Halts Hedge Fund Withdrawals on Subprime Losses

(Bloomberg) -- John Devaney, who invests in subprime
mortgage bonds, restricted redemptions to protect some of his
Horizon Strategy hedge funds from being forced to sell assets.

It's ``a defensive move because we had an unusually high
number of redemption requests and we didn't want to be a forced
seller in this market,'' Michael Gregory, a spokesman for
Devaney's United Capital Markets Holdings Inc. said yesterday. One
investor who wanted to withdraw accounted for about 25 percent of
the funds' money, he said. United Capital, based in Key Biscayne,
Florida, oversaw $620 million in its fund group as of March 31 and
$266 million in its money-losing Horizon ABS funds, an April
investor letter said.


Read more at Bloomberg Bonds News

Bear Stearns manager warned of collapse in February

(Reuters) - Now Blackstone Group, the private equity giant, is
presenting a plan to rescue Cioffi's Bear Stearns Cos.
hedge fund that is on the brink of collapse, and Bear Stearns
is infusing $1.5 billion of its own capital to save the fund,
according to people familiar with the situation on Tuesday.




The fund already has sold off $4 billion in mortgage-backed
securities to raise money that could pay redemptions and margin
calls after the Bear Stearns High-Grade Structured Credit
Strategies fund won a reprieve from creditors on Monday,
gaining one more day to present a rescue plan.


Read more at Reuters.com Bonds News

Bear Stearns Will Liquidate Mortgage Holdings From Hedge Fund, People Say

(Bloomberg) -- Bear Stearns Cos., the second-biggest
U.S. underwriter of mortgage bonds, is liquidating holdings from
one of its hedge funds after making money-losing bets on subprime
home loans, three people familiar with the situation said.

Bear Stearns is seeking bids today from prospective buyers
for about $3.8 billion of mortgage bonds, said the people, who
declined to be identified because the plan isn't public. The 10-
month-old Bear Stearns High-Grade Structured Credit Strategies
Enhanced Leverage Fund, which is down about 20 percent this year,
had about $600 million of investors' money and borrowed to
increase its buying power, one of the people said.


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