Cerberus Readies CMBS Fund

Apr 9 2013 | 10:15am ET

Cerberus Capital Management is planning a new fund to invest in commercial mortgage-backed securities, including the riskiest tranches of the derivatives.

The firm sought to sell the fund and strategy at a dinner in Manhattan last month for prospective investors. Cerberus said it believes that the CMBS Opportunities Fund could produce returns as high as 35%, The Wall Street Journal reports.

U.S. CMBS issuance is roaring back after five years of muted activity in the wake of the financial crisis. The first quarter alone saw almost $23 billion in issuance, almost half the total issuance from last year. In an investor presentation, Cerberus noted that "bad habits are returning."

In spite of that, and the risks, Cerberus told investors that it believes it can profit from CMBS. The new fund would buy both subordinated CMBS while simultaneously shorting the market with indices.

Cerberus' existing commercial-mortgage bond portfolio returned 47% last year and is up 11% this year.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.