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Non-Tech : Berkeley Technology Limited (BLKYY) -- Ignore unavailable to you. Want to Upgrade?

To: J. Conley who wrote (226)	3/26/2000 9:49:00 PM
From: J. Conley	Read Replies (1) \| Respond to of 955

A couple more things: Absent was any mention of the private debt issue (now non-issue). LDP apparently did very well on solving this situation in a favorable manner. I think on this matter LDP exceeded Bear Stearns' previous expectations. Much more important is the implication in Bear Stearns' comments regarding what they call "allocation arbitrage". IMO, the mention of this idea is an extremely bullish statement by Bear Stearns regarding the private equity potential. (It is no wonder management is having a rather hard time containing their enthusiasm right now.) Regarding "allocation arbitrage" Bear Stearns states that because there is such enthusiastic investment interest in certain of the LDP holdings, and because investors are constrained by allocation limits during the "IPO share distribution process," that those investors will invest in LDP as a method of securing additional equity exposure in an indirect manner. Bear Stearns states they believe that institutional investors will increasingly engage in this practice. It is no wonder that Bear Stearns was calling for close to a double in its revised target, and believe it or not, they are likely still being conservative. Bear Stearns accompanied LDP on the road show, and I'm sure got a clearer picture of the company and the measure of potential institutional support. I don't think the split, the new target, and the comments in the report are a mere coincidence. One more thing about risk. I mentioned before that I believe LDP has reduced risk for a technology stock because they avoid the ordinary risks of directly developing and manufacturing a product and selling it to customers. Bear Stearns in their report notes an additional factor. That is, that LDP, in a general downturn in tech stocks, would benefit by using such downturn to invest "opportunistically" with the continuing cash flow from the insurance business. It appears that Bear Stearns is saying if tech stocks go down LDP may actually benefit and it would likely be a good buy on any prolonged dip.