Subprime Mortgage Woes Extend to Hedge Funds

The subprime mortgage woes are now affecting hedge funds, with one closing up shop and the other halting investors from withdrawing their money, according to The Wall Street Journal.

Denver-based Braddock Financial Corp. wrote a letter to investors this week stating it was closing its roughly $300 million Galena Street Fund, which invests primarily in bonds backed by subprime mortgages extended to borrowers with poor credit, and suspended redemptions until it can sell assets.