Fears that the US sub-prime mortgage market could cause a full-blown credit crisis have wiped more than $860 billion (624 billion) off the stock market value of European and US banks, insurance companies and listed asset managers, according to analysis by Financial News.
The fall in financial sector share prices from 52-week highs exceeds other market declines. As at 1600 GMT last Friday, the S&P 500 and London’s FTSE 100 were 6.9 percent and 10.6 percent respectively below 52-week highs set last month.
Listed hedge funds and private equity firms are the worst hit in the sample of 100 listed investment banks, banks, insurers, fund managers and alternative asset managers. Alternatives managers have fallen 30.2% from their collective highs this year, wiping more than $37bn off their stock market value.
The collapse was led by Fortress Investment Group, the alternatives manager that went public this year and whose shares have fallen 50.3 percent from their high of $37. Blackstone Group has lost $14.7 billion in market value after its shares fell as much as 35.6 percent from their high since floating in June.