Bear Stearns Loses $8 billion in Alternative Assets
Although Bear is trying to spin this positively, the loss of an $8 billion hedge fund strategy has got to hurt.
Bear Stearns Asset Management will lose 18% of its $44bn in assets under management when a senior executive leaves to set up his own firm.
Jeff Lane, the bank’s new head of asset management, said on a conference call that James O’Shaughnessy will take a portfolio valued at $8bn with him when he departs to set up his own asset management firm. O’Shaughnessy, who is head of Bear Stearns’ systematic equity team, had announced his departure in July.
Lane said, however, the bank’s fee-sharing arrangement with O’Shaughnessy means there would not be a “major financial implication” for the bank.
Jeff Lane is rolling up his sleeves trying to get BSAM in order, but recruiting new managers and alternative strategies has got to be a tough sell. It sounds like a number of acquisitions are in the works, which might be the only way to grow Bear’s hedge fund business in the months ahead. Bear will be attempting to build up its long only strategies as well, and we wish them well.
Growing the asset management business is going to be an uphill climb.
Departing executive takes chunk out of Bear Stearns
Financial News
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