Standish Mellon Asset Management will launch two investment strategies to allow clients to pursue opportunities offered by the government’s Term Asset-Backed Securities Loan Facility program.
The first Standish investment strategy will target new issues of consumer asset-backed securities and commercial mortgage-backed securities, while the second “expanded TALF strategy” will invest in legacy assets as well, including non-agency CMBS, consumer ABS and non-agency residential mortgage-backed securities.
According to a news release from Standish Mellon, the company has received “strong expressions of interest from its clients” for the strategies.
In a telephone interview, Desmond Mac Intyre, president and CEO, said early participants in TALF are likely to see the highest returns, but he expressed confidence that Standish Mellon’s strong research capabilities will be capable of delivering “reasonable long-term returns” even as the program matures.
In the same interview, Tom Graf, managing director of structured products and global workout solutions, said while returns will vary depending on the type of assets involved and the terms of finance, investors can probably expect to enjoy stronger annualized gains from legacy TALF assets, perhaps 15% or more, than the 10% to 12% returns that are more likely from new TALF assets.
