Hedge Funds Subprime Mortgage Bonds
Hedge Funds Looking to Get Back into Subprime Mortgages
“Champing at the bit,” is how one hedge fund trader who invests in distressed debt put it.
The Wall Street Journal reported Friday that the Fed had tapped asset management firm BlackRock to help sell off portions of the $30 billion Maiden Lane II portfolio, which is made up of bonds and derivatives acquired when the government bailed out American International Group.
Earlier this month, AIG offered to buy the bonds from the Fed for $15.7 billion—about half their face value.
People familiar with the matter say the interested hedge funds include John Paulson’s Paulson & Co, Jeff Gundlach’s DoubleLine Capital LP, Mark Lasry's Avenue Capital Group and Oaktree Capital Management. The funds either could not be reached or declined to comment. They declined to comment for competitive reasons. Source