Unraveling Lehman's tangled web

Thu Oct 30, 2008



After the broker/dealer’s bankruptcy, fund managers are learning about counterparty risk – the hard way.


After the broker/dealer's bankruptcy, fund managers are learning about counterparty risk - the hard way

By Carolyn Sargent

With strong returns and a ballooning asset base, Amber Capital Investment Management had great plans for the future. Its sleek, high-design offices on the 57th floor of the 59-story Citigroup Center offer sweeping views of Manhattan and - as a long hallway of empty offices attests - plenty of room for more staff.

But in a few short weeks, Amber's world has turned upside down. The firm, which at its peak last year managed $7.2 billion, lost money earlier this year and was in the midst of restructuring when Lehman Brothers, its prime broker, declared bankruptcy. Between $300 million and $500 million is now caught up in Amber's London prime brokerage account - a serious chunk of the roughly $2.1 billion the firm now manages.

Amber thought it was protected, having taken the...

ISSN: 2151-1845 / CDC10004H

Register

By registering you will receive

  • A monthly newsletter on your specified areas of interest
  • A fortnightly update on the sector

Free Trial

Take a trial today and access

  • Performance news, fund launches, regulation changes and people moves
  • Profiles of fund managers, investors and distributors
  • Live league tables
  • Investor mandates


Popular Searches on HFI