Yet Another Bear Stearns Hedge Fund Is on the Ropes

If Wall Street thought the worst was over for Bear Stearns(BSC Quote), it can think again. The bad news just keeps on rolling.

Another Bear fund is facing margin calls.

Two other Bear hedge funds, exposed to subprime loans, collapsed in June.

Rumors about the third fund, which reportedly has far lower exposure to subprime loans, have been floating internally at Bear since last week. Observers told TheStreet.com that the $900 million hedge fund run by Colin Gordon was underwater and was on the brink.

Reached by phone Tuesday, Gordon pointed to the fund's performance on research analytics firm Hedgefund.net but declined to comment further.

The fund -- identified on WSJ.com late Tuesday as the Bear Stearns Asset-Backed Securities Fund -- was up a little more than 1% in May and about 5.25% for the year, but it did not provide details about its performance in June and July, when most investment managers faced the significant stress of the subprime blowup.

A Hedgefund.net spokesman declined to comment on the fund's numbers.

The fund appears to be facing margin calls of about $50 million, according to a report by Bloomberg late Tuesday.

Swedish fund of funds Ohman, run by Magnus Nilson and Thomas Nilson, has a stake in the Bear fund. Calls to the Swedish fund were not returned.

A Bear spokesman declined to comment or provide additional details.