They tended to operate with very high leverage, depending their funding from money market, as well as debt market. On this regard, the liquidity of those markets is a crucial key, since in high leverage circumstance, counterparty risk could easily jump.
As a consequence, when there is a serious disruption in money market, as we observed during financial crisis, funding becomes more difficult for those institutions. They had to undertake force sale of their assets, experienced big losses, and some of them even collapsed or had to be bailed-out by the government.