Basis Capital Fund Management hired Blackstone Group LP as an adviser after the Australian hedge fund manager was battered by losses in the U.S. subprime mortgage market, Bloomberg reports.
Blackstone, already helping Bear Stearns Cos. with two failed hedge funds, will advise Basis Capital “to prevent adverse pricing and selling of assets,” the Sydney-based firm said in a statement today. Basis Capital said July 18 the value of its Yield Alpha Fund may fall more than 50 percent if its assets are sold at distressed prices.
The losses at the fund, which recorded an average annual return of 15.5 percent for the past five years, underscores the global impact of the subprime shakeout.
“The fallout from subprime is likely to impact most asset classes and investment strategies over the next couple of years,” says Peter Douglas, the principal and founder of Singapore-based hedge fund research firm GFIA Pte.