AllianceBernstein liquidates Public-Private Investment Program fund for Treasury

AllianceBernstein (AB) on Tuesday liquidated its Legacy Securities Fund, part of the U.S. Treasury's Public-Private Investment Program, confirmed Michael Canter, chief investment officer of the fund and head of securitized assets.

The fund had an internal rate of return, net of fees and expenses, of 18.7% since inception in October 2009.

The Treasury, which made an equity investment of $1.06 billion, received $1.54 billion in distributions. AllianceBernstein also repaid with interest the $2.13 billion in debt the Treasury provided to the fund.

“The objective of the program itself has certainly been met,” Mr. Canter said in a telephone interview. “The assets are now traded every day, and the market has become quite liquid in the last three or four months.”

Mr. Canter said the PPIP fund's strategy was to invest capital “sooner rather than later” with a positive view on the economic recovery at the time. He added the stabilization of housing prices helped residential and commercial mortgage-backed securities prices to increase.

The investment period for the fund ends this month.