The Treasury Department announced Wednesday that more than 100 fund managers have applied to participate in the agency's effort to encourage private purchases of bad assets from financial institutions. Managers applying ranged from operators of traditional fixed income to real estate and alternative asset funds.
Treasury said it will select applicants that "demonstrate a capacity to raise private capital and manage funds in a manner consistent with Treasury's goal of protecting taxpayers." The agency also said it will evaluate the applicant's experience investing in the types of assets that banks seek to dispose. All applicants must be headquartered in the U.S.
Treasury did not release a list of applicants, but some have announced their wish to participate. Monday, money manager Invesco Ltd. (NYSE:IVZ) and investor Wilbur Ross said they are leading a group that will commit $1 billion to buy toxic bank loans and securities through the government's initiative, formally titled the Public-Private Investment Program. Other major participants in the Invesco group are the LeFrak Organization, a top real estate developer; and two companies controlled by Ross -- bond insurer Assured Guaranty Ltd. and American Home Mortgage Servicing Inc. Also in the group are Muriel Siebert & Co, a woman-owned brokerage, and two minority-owned investment banks, New York-based Williams Capital Group and Jackson Securities in Atlanta.
Treasury has encouraged small, veteran-, minority- and women-owned private asset managers to partner with other private asset managers and extended the deadline for fund manager applications in order to provide more time to form these types of partnerships. "We are pleased to see a number of creative partnership proposals among the applications," Treasury said.
Treasury said it will notify applicants that receive preliminary qualification "around May 15." Preliminary qualification entitles an institution to begin raising funds. The minimum required amount of private capital is expected to be $500 million in private capital and will be matched with taxpayer funds. Treasury reiterated that later it intends to open the program to smaller fund managers seeking a lower capital raising requirement. - Bill McConnell in Washington
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