Late payments by less credit-worthy consumers have hurt U.S. hedge funds, notably funds run by Bear Stearns, but losses recently announced by three Australian hedge funds have fanned concerns that the credit problems on Main Street are spreading to overseas investors.

Australian hedge funds Basis Capital, one of that nation's largest and best-known hedge funds, and Mariner Bridge Investments told their investors that they have incurred significant losses related to problems with subprime debt investments. Meanwhile, a third fund, Absolute Capital, said it had temporarily suspended its Yield Strategies Funds "due to the current lack of liquidity in global structured credit markets."

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.