Pacific Investment Management Co. raised funds from clients to invest in ” toxic ” assets , write Western media reports citing its sources .
Thus, Bill Gross , head of PIMCO, one of the world’s largest asset management companies , finally gave up . He was probably the last manager, who admitted that the ten-year Treasuries yield 2.5 % need to buy shares rather than bonds .
Many of our colleagues have long shifted their appetites in favor of higher-yielding assets .
This is confirmed by the latest data on profitability , according to which the largest fund PIMCO gives 70% of its competitors.
Not only that Gross himself has changed , so more and assets for investment , according to sources, selected the most that neither is ” toxic .”
But first things first .
We are talking about the fund Bravo II, which was drawn as much $ 5.5 billion At the moment it is closed to new customers . So, the money will be invested in the banking sector the U.S. and Europe , but it will not stocks or bonds , it will actually be ” toxic ” assets , ie those on which banks urgently need to get rid of. In other words, write them off their balance sheets .
In fact , it is overdue loans as banks for the purchase of property , and for other purposes. This “good” in European lenders , as they say, above the roof . No wonder the IMF back in 2012 ordered the bankers to get rid of these “bad ” loans up to 2014 According to estimates of the IMF , while the amount of “junk” was about $ 4.5 billion
If you look at the calendar , it becomes clear – banks are out of schedule . Of course , it is foolish to believe that they have not been touched for clearing balances , but to find enough buyers for these assets is no easy task . Because time is running out , dictate the price buyers will now exclusively . Banks , in turn, will pray for purchase.
And yet, this same ” toxic ” debt , ie loans overdue already several times. As the asset can be a good investment? Probably .
The assumption is that the price paid for such assets is negligible with respect to its nominal value , and on the back of economic recovery there is a chance that those unemployed who are the debtors and finally find a new place in the labor market and then “dead” credit revive. Payments on it will quickly make profitable the debt holder .
Among hedge funds there is a special classification for those involved in such investments . One may recall , for example, the fund invested in Mark Mobius bonds Greece almost at the floor level . Earnings eventually exceeded 200 %.
With the search sellers at PIMCO problems should arise . Proposal is sufficiently large. Thus, according to The Wall Street Journal, Commerzbank in February sold its portfolio of mortgage loans issued in Spain for 710 million euros.
British RBS sold a portfolio of loans for the construction of commercial real estate hedge fund Varde Partners. A private equity firm KKR from the U.S. recently completed negotiations for the purchase of ” toxic ” assets from Italian banks Intesa Sanpaolo and UniCredit.
The question remains , what PIMCO has been uncharacteristic work for yourself ? The answer is obvious : because of the low yield for several months of the company’s funds outflow of funds. In order to catch up, Bill Gross , and decided on this action .