SPM Launches Residential Mortgage Prepayment Hedge Fund

Apr 15 2008 | 11:35am ET

Stamford, Conn.-based Structured Portfolio Management has launched a hedge fund to take advantage of significant slowdowns in the residential mortgage prepayment market. 

The SPM Directional Mortgage Prepayment Strategy fund will invest in various types of interest-only mortgage backed securities.
 
“We believe that as a knock-on consequence of housing prices dropping and the imposition of extra fees and more constrained underwritings of mortgages in the prime mortgage sector, that the response on average of mortgagors to a rate incentive for refinancing is going to be substantially lower than it has been in the past,” Don Brownstein, SPM’s CEO and chief investment officer, told FINalternatives. 

“So we think there is money to be made by effectively taking positions which reflect that view about prepayments.”

SPM currently manages four funds with long investment horizons as well as three directional funds that are designed to exploit short to mid-term market opportunities. The firm also runs a Composite Fund that allocates across all of its funds’ strategies. All told, SPM currently manages approximately $1.2 billion in investor assets.


In Depth

Q&A: Star Mountain's Brett Hickey On Investing In 'The Growth Engine Of America'

Sep 22 2017 | 5:06pm ET

Lower middle-market companies form the economic fabric of the nation, but they can...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Don’t Overlook These 6 Hybrid Cloud Concerns

Sep 14 2017 | 6:27pm ET

Cloud-based technology solutions have made tremendous inroads into the alternative...

 

From the current issue of

With NFL season on the horizon, it’s time to take a look at our Fantasy Football value picks. Last year, we nailed it on Drew Brees, Jordan Howard, Frank Gore and Dwayne Allen. We missed pretty badly on Duke Johnson, Demaryius Thomas, Mohammed Sanu and Eli Manning.