A new hedge fund seeking to profit from the credit crunch has made its first deal. The Oxford Opportunistic Mortgage Fund has reached an agreement to purchase its first pool of mortgages with a principal balance of approximately $5.3 million.

"This kicks off our fund," said Ron Redd, CEO of Oxford Funding Corp., "but this is only the beginning. It gets the Fund in operation, and we consider the positive response of investors to the fund to be a validation of our belief that there are very profitable opportunities available in today's mortgage market."

Oxford is banking on write-downs from big-name Wall St. firms to fill its pipeline with deal flow. 

"GMAC just announced a $724 million dollar loss for the quarter, Credit Suisse wrote down $1.88 billion dollars in debt and AIG put its two-month subprime loss at $5 billion and other companies like Bear Stearns and Lehman Brothers have, also, announced huge write downs,” said Robert Dunn, president of Oxford Funding. “Every time this happens we have another opportunity to pick up highly discounted portfolios and another chance to turn them into significant profit for our shareholders."

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