Structured finance contributes to hard times for Babcock & Brown

Australian investment group Babcock Brown has warned that H1 profit
reports may show as large a drop as 40 per cent year on year, due
to large provisions on the value of its real estate and structured
finance assets. 
The announcement came just over a week shy of the group’s first
half report being published, and immediately pushed shares down
11.8 per cent to €3.5.
The group, which controls telecoms company Eircom, has seen poor
performance in 2008 after trading at a high of €18.9 in H2 of last
year.  The fall in value has been prompted by criticism of the
group’s business model and use of debt.
The group is also conducting a review of its underperforming
specialist funds.