Dalton Teams Up With Countrywide Vets To Unveil Mortgage Offerings

Apr 23 2008 | 2:00am ET

Los Angeles-based Dalton Investments, a $1 billion Asia-focused alternatives shop, is jumping into the fray with the launch of its first mortgage debt hedge fund.

Rather than a traditional hedge fund, the firm is offering a series of trusts—the first one will launch in mid-May—within the mortgage space with a minimum of $50 million in initial assets, according to a source familiar with the firm’s initiatives.

“It’s a one-time close per series, so they’re planning on launching another one sometime in July,” the source told FINalternatives.

“Each series will have different liquidating terms, so by the time the second series is launched, the first one will be invested,” the source added. “After six months, they’ll start returning cash flow from the portfolio to investors and they anticipate that in three years, they‘ll be done liquidating any remaining securities in the portfolio.”

Dalton is taking a buy-and-hold approach to the market because the “returns that you get are not dependent upon the resale of those securities but reliant upon the structure of those securities and the cash flow that they generate.” The firm is putting together its portfolio of subprime securitized assets “security by security” and performing analyses at the individual loan level, with the help of new hires, Todd Sherer and Ryan Hetherington, former distressed traders at Countrywide Financial Corp.

“The hires give the firm an added cushion because they ensure the quality of the bonds that it buys,” said the source.

The new offering is Dalton’s fifth. The source said the firm’s Asian strategies are doing well realtive to the indices but not on an absolute basis because of the exodus of capital in the region.


In Depth

High Time For A Cannabis Hedge Fund?

Sep 30 2014 | 7:07am ET

Launching a hedge fund is always a gamble, but Leslie Bocskor's decision to launch...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Appraisal Ratio Key To Evaluating Hedge Funds And Other New Investments

Sep 29 2014 | 3:07pm ET

As a former finance professor Peter Hecht experiences heartburn every time he hears...

 

Videos

Editor's Note

    Must Attend Hedge Fund Charity Events For October

    Sep 30 2014 | 9:29am ET

    The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…

 

Futures Magazine

September 2014 Cover

High frequency market making

High frequency trading is not evil, it is not a conspiracy and it really is not new; it is the natural evolution of the professional trading community making markets, providing liquidity and hopefully...

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.