FT.com- Hedge funds and institutional investors are starting to launch distressed mortgage funds to take advantage of an "unbelievable" buying opportunity, but they say they are running into resistance from risk-averse prime brokers.
Steve Persky, a principal at Dalton Investments, said his group was starting a distressed mortgage strategy for high net-worth and institutional investors. "This is one of the best distressed sector opportunities I have seen in my lifetime," said Mr Persky, who has been investing for more than 20 years.
"Prices have collapsed to such a level that some securities assume you will never get any capital back . . . It is an incredible buyers’ market. Institutions are desperate to sell. There is such a huge flight to quality, it has gotten very extreme."
