Monday, 6 July 2015
Last updated 31 min 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.”
May 27 2015 | 2:15pm ET
Support Hedge Funds Care, also known as Help For Children (HFC), by participating in this year's raffle. All proceeds go to support HFC's mission of preventing and treating child abuse. Read more…