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Derivatives

Hedge Funds Look For Sub-Prime Talent

Firms, including Halcyon Asset Management, Guggenheim Partners, Petra Capital and Black River Asset Management, are said to be scoping synthetic mortgage-backed securities structurers and traders because they believe the market is ripe for bargain-hunting sub-prime MBS.

Firms, including Halcyon Asset Management,Guggenheim Partners,Petra Capital andBlack River Asset Management, are said to be scoping synthetic mortgage-backed securities structurers and traders because they believe the market is ripe for bargain-hunting sub-prime MBS.

Sub-prime MBS issuance has has fallen by more than half in the first two months of this year and that has sellside talent looking for a move to buyside. They are meeting an interested audience, according to headhunters, who said they have been retained by hedge funds looking for experienced ABS analysts and traders to manage cash and synthetic portfolios.

Officials at these funds did not respond to calls.

One headhunter said he has focused on nothing else in the past month except talking to members of mortgage groups looking to leave Street firms. Just over USD40 billion of home-equity and sub-prime mortgage deals have priced in the first two months of 2007, down from more than USD85 billion in the same period of 2006.

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