News&Notes: Commercial Real-Estate Casualties & Lehman Fallout

RCM Comment: Coming to you live from the road in San Diego: Happy Thanksgiving!

Perot Fund liquidates as debt bets turn sour - WSJ
WSJ reports last week's record plunge of the commercial real-estate securities market has claimed its first major casualty: a $1.5 billion fund with investors including Texas billionaire H. Ross Perot and members of his family, said people familiar with the matter. Other hedge funds and money-management cos that invested in real-estate debt face the potential for more margin calls. These include a $2 billion fund managed by Petra Capital Management, a co founded by Andy Stone, one of the founders of the commercial-mortgage securities business. Also, Guggenheim Partners, one of the best-known managers in the business of investing in commercial real-estate debt, recently asked its investors for about $300 million in additional capital to help one of its debt funds to pay down borrowings. And Centerline Holding, the asset manager led by real-estate mogul Stephen Ross, is talking to its lenders to restructure its loan obligations. Mr. Ross and Edward Shugrue III, manager of real-estate debt funds for Guggenheim, declined to comment. The woes of these funds promise to put more strain on the banking sector. Banks that have made short-term loans to these funds mightn't recoup all their money even if the funds liquidate.

Groups in Lehman asset trap - FT
FT reports several companies reliant on four US hedge funds face collapse because the funds cannot access shares and loans held at the London arm of Lehman Brothers, the collapsed bank. The four funds -- whose names were kept secret in a High Court ruling this week -- claimed that they were likely to close in mid-December if they failed to get access to information about their assets frozen at Lehman. The funds made an unsuccessful effort to force the administrators of Lehman, four PwC partners, to give them details of their assets and how much they owe to ­Lehman. The funds are likely to be followed by "numerous" others of the 1,000 former clients of the Lehman prime brokerage, Lehman Brothers International (Europe), according to PwC. The warnings from the funds follow several cases of funds closing or blocking withdrawals because they cannot access holdings at Lehman, even though they expect to recover them. In his ruling, Mr Justice Blackburne said the funds argued that, if they could not get information on their assets by mid-December, "it is likely that the funds will be wound down forthwith". As well as job losses, "the funds' inability to engage in restructuring will probably lead to the collapse of at least four companies in which securities are held".