The Banking and Strategy Initiative

Chillin' out till it needs to be funded

Deutsche Bank – Making money from Distressed Assets | Bank Insight

DB estimates that more than 480 bln to $100 bln of distressed assets turned over to hedge funds in 2009 and 2010 are choking funds that want to get into new investtments and assets and are stuck with a crisis legacy they do not need. The bank will start with a $500 mln fund with Rosebrook advisors to sponge up such assets as it feels that will help them meet their new capital criteria and the bank will likely hold them for the long run, looking at a windfall much longer down the road

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Many hedge funds are stuck with Side pockets and gated investments , investors having demanded to leave but PE funds admitting being stuck with illiquid investments . Side Pockets require exit for such investors as and when they demanded. With each side pocket, investors got part of their returned money in untradeable IOUs holding such illiquid assets

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