Lehman Won't Return Prime Broker Assets for `Months'
Sept. 22 (Bloomberg) --Hedge fund prime brokerage assets held by Lehman Brothers Holdings Inc. won't be returned for a ``considerable time,'' according to PricewaterhouseCoopers, administrator for the largest bankruptcy.
``Our current view is that this process could take several months to conclude,'' PwC said in a Regulatory News Service statement today.
Lehman had the right to lend clients' prime brokerage securities as collateral for loans and margins in the stock loan and repo markets, PwC said.
``The assets, once `used,' were no longer held for the client on a segregated basis, and as a result the client may cease to have any proprietary interest in them,'' PwC said in the statement.
PwC said it was sorting through the assets held on behalf of ``many hundreds of clients'' and that it has been working ``very closely'' with the U.K.'s Financial Services Authority. Determining which assets are Lehman's and which are its clients' is ``exceptionally complex,'' Steven Pearson, a partner at PwC, said in an Internet presentation last week.
GLG Partners Inc., the $24 billion hedge fund that started as a unit of Lehman 13 years ago, last week said some ``residual'' trades with Lehman didn't clear before it filed for bankruptcy. GLG was one of hundreds of hedge funds that used Lehman as a prime broker.
Prime brokers provide hedge funds and other clients with services such as stock lending, margin and trade clearing. |
