Since the inception of Modern Trader, a core editorial theme has centered on the wisdom and power of crowds. Editorial emphasis has focused on companies and projects engaged in the collection and analysis of information.
Thursday, 8 December 2016
Last updated 14 hours ago
Jul 23 2007 | 11:41am ET
Hedge fund manager Michael Vranos, founder of Ellington Management, is looking at the carnage in the sub-prime mortgage market and seeing a big opportunity. He is seeking some $750 million in permanent capital for a new vehicle that will invest in sub-prime residential mortgage loans.
According to The New York Times, which obtained a copy of the offering statement for Ellington Financial, almost one-tenth of the money raised for that vehicle would go to investing in Spyderion Holdings, a real estate investment trust Vranos set up just two months ago. The trust, in turn, is the owner of some $345 million of risky equity residuals.
The Times speculates that Ellington Financial may be, in part, a way for Vranos to get more for the sub-prime assets than he would be able to on the open market.
Vranos—who wasn’t happy about the newspaper seeing the offering, which is a private placement for institutional investors only—denied that unloading the residuals, issued by the now-bankrupt New Century Financial Corp., was the motivation for Ellington Financial.
“I don’t know if they’ve declined. I’m not responsible for pricing them—we use third-party pricing,” he told the paper. “That’s obviously a question that potential limiteds ask all the time. Obviously we have an answer.”