Bear Stearns says 'no value' left in troubled hedge fund ($20 Bil goes "poof")

[UpInArms]

Source: AFP

NEW YORK (AFP) - Wall Street firm Bear Stearns has told investors in a hedge fund it manages that the fund's value has been wiped out following losses of billions of dollars tied to mortgage securities.

The investment bank and brokerage said in a letter to investors, obtained by AFP Wednesday, that its Enhanced Leverage Fund, has "no value left" while another hedge fund it runs had "very little value left."

The funds had previously amassed a total of over 20 billion dollars in investments, largely with money obtained from investors, some Bear Stearns executives and other banks, according to media reports.

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The two Bear Stearns' funds, which also included the High-Grade Fund, floundered after risky securities bets related to subprime mortgages soured.

Such mortgage loans, granted to Americans with patchy credit records, have been plagued in recent months by late payments and a rising tide of home foreclosures amid a year-long housing market slump.

Read more: http://news.yahoo.com/s/afp/20070718/bs_afp/uscompanyfinance