New York – Citadel Investment Group has topped Credit Suisse in an auction, agreeing to pay about $180 million for bankrupt ResMAE Mortgage Corp.
 
Citadel, a $13.4 billion Chicago-based hedge fund, said they will allow ResMAE, the bankrupt subprime mortgagelender, to work as an autonimous unit and allow founders Jack Mayesh and Ed Resendez to stay in control of the company. Subprime loans are offered to borrowerswith spotty credit and lower incomes, the sector has descended into crisis as interest rates climbed from record lows.

ResMAE filed for bankruptcy in February, the firm said in the filing that it planned to sell most of its assets to Credit Suisse. However, hedge fund Citadel offered to pay $22.4 million, a break-upfee of up to $1.5 million plus ResMAE loans for 98.5% of their face value, or roughly $160 million.

Since its founding as a $4.6 million convertible arbitrage fund in 1990, Citadel has grown into a sophisticated alternative investment institution. The hedge fund has seven main areas of focus including equities, fixed income and energy trading.

Alex Akesson
Contributing Writer
HedgeCo.Net
Email: Editor@hedgeco.net

Comments are closed.