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Lehman reveals hedge risk
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October 5, 1998: 3:35 p.m. ET
Firm says $447M exposure to hedge funds well protected by collateral
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NEW YORK (CNNfn) - Lehman Brothers Holdings Inc. said Monday its exposure to hedge funds totals $447 million -- but Lehman said that its exposure is backed up by $583 million in collateral.
The investment bank said in a statement that its uncollateralized exposure - that is, money not offset by cash, U.S. Treasuries or U.S. agency securities - totaled $72 million.
With its announcement, Lehman Brothers became the latest Wall Street financial institution to disclose its exposure to hedge funds in the wake of the near-collapse of Long-Term Capital Management (LTCM).
Last week, Merrill Lynch & Co. (MER) and Chase Manhattan Corp. (CMB) both revealed their hedge-fund exposures.
Lehman was one of more than a dozen banks that worked with the Federal Reserve Bank of New York in mid-September to provide a $3.6-billion bail out package for LTCM.
Lehman said its exposure to LTCM totaled $32 million, backed up by $41 million in U.S. Treasuries.
Lehman Brothers (LEH) shares were off 2-1/4 at 26-3/4 in late-afternoon trading. 
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Lehman Brothers
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