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Technology Stocks : Flextronics International (FLEX) -- Ignore unavailable to you. Want to Upgrade?

To: kolo55 who wrote (761)	9/4/1998 7:38:00 AM
From: Asymmetric	Read Replies (1) \| Respond to of 1422

Top Stories: Market Puts Hedge Funds on the Hot Seat. Who's Next? (excerpts from Street.com. The only reason for a big seller to dump Flexf at these distressed prices is because there is little other choice. This article though focused on funds with Russian exposure, might highlight who is possibly selling and why. If I'm stretching here, so be it, but I don't think so. Peter) By Suzanne Kapner Staff Reporter 9/3/98 "Wall Street is taking a lot of pain," said one hedge-fund manager whose fund had been the subject of implosion rumors this week. "But we're okay." Within days, that phrase has become a cliche. But now as more hedge-fund managers start alluding to losses and some preliminary numbers are emerging, speculation is growing that more bad news and more cratering funds will follow. This doomsday scenario is a white-knuckle one for many in the high-net-worth-investor set who have used the investment vehicles so successfully for so many years. Rumors of additional blowups among hedge funds are rampant; however, verification of such talk is more difficult to come by. In fact, it often seemed like the only hedge fund on Wall Street that wasn't underwater was the one on the other end of the phone line at the time. ("I'm only down about 30 basis points after [Monday], so I call that a win," said a fund manager, requesting anonymity.) As wild rumors of imminent implosion swirled among the usually secretive clique of hedge-fund managers and their clients, some names popped up more than others. Among them: Croesus Capital Management confirmed it has "some exposure" to Russia in its $400 million under management. But a spokeswoman at the Manhattan hedge fund declined to specify the percentage. (Hedge/MAR, a data fund-tracking service, listed Croesus' UFG Russia Fund as its weakest performer, posting a 57.5% loss for August.) ...Andrew Boszhardt Jr., partner at Oscar Capital in New York, which manages a total $600 million in assets under several different funds, said the firm's hedge fund was down 20% year to date. "We're volatile," Boszhardt said. "In 1994, we were down 30%, but last year we were up 62% net of fees." Oscar has lightened up some positions and is solvent in highly liquid names, such as Travelers (TRV:NYSE), Ford (F:NYSE) and Merrill Lynch (MER:NYSE), he said. Oscar Capital's investors also have agreed not to withdraw funds until Jan. 1, 2000. ...All the stiff upper lips, however, do not mean that fund managers have stopped buying Pepto Bismol. "Wait until the [third-quarter results], you will see funds losing tons and tons," said Jeff Werbalowsky, senior managing director at Houlihan Lokey Howard & Zukin, a Los Angeles-based specialty investment bank and consulting firm. Hedge-fund heavyweights such as Everest Capital, Omega Advisors and Appoloosa have already either announced losses or seen them reported in the press. And yesterday, Long Term Capital, a $2.3 billion fund run by the former vice chairman of Salomon, John Meriwether, joined the crowd. LTC issued a press release saying it "experienced significant decline" in net asset value during August -- reports put the figure at a 44% loss. Year to date, the fund has lost about 50%, according to the release. A spokesman for the firm would not comment beyond the release. Overall, about 75% out of 155 hedge funds reporting results were negative in August, said Lois Peltz, Hedge/MAR's managing editor. More alarmingly than the numbers themselves, said Peltz, is that certain funds aren't calculating their net asset values or allowing redemptions on the rationale that they don't know what the underlying securities are worth. Their attitude is: "If we give you an estimate, it might be wrong," Peltz said, adding that some funds are allowed to do that according to their prospectus. For example, the Hong Kong-based Regent Pacific Group last week suspended redemptions for 12 of its funds, many of which carried heavy Russian exposure.