Barclays may have lost big in Bear fund: report
CHICAGO (Reuters) - Barclays PLC (BARC.L) may have tallied big losses in a Bear Stearns Cos. BSC.N hedge fund that invested in risky mortgages, The Wall Street Journal reported on Saturday.
The London-based bank invested some $400 million in Bear Stearns Asset Management's High-Grade Structured Credit Strategies Enhanced Leveraged Fund, the newspaper said, quoting people familiar with the matter.
Bear Stearns said on Tuesday that assets in the fund are at this point essentially worthless.
The Journal said Barclays was reviewing its options for recovering the $400 million, citing arbitration, a negotiated settlement or litigation as possible strategies.
In a recent statement Barclays said it had "some" exposure to the Bear fund.
Fallout from the hedge fund's collapse is gaining momentum amid spreading worries about losses from the subprime mortgage market as loan defaults rise.
The television channel CNBC reported on Friday that investors were planning to sue Bear Stearns as early as Monday, alleging misrepresentation of the risks involved in the fund.
Subprime loans, made to borrowers with poor credit histories at relatively high interest rates, have been a small but rapidly growing slice of the overall U.S. mortgage market in recent years.
