Unstructured Finance

Wall Street gold rush in foreclosed homes heads north

By Matthew Goldstein and Jennifer Ablan

The state of Alaska is looking to cash in on the growing demand for renting out foreclosed single-family homes.

A spokeswoman for the $40 billion Alaska Permanent Fund recently approved a $400 million investment with a California-based company that specializes in buying foreclosed homes and renting them out. Laura Achee said the fund is still negotiating the terms of the deal with American Homes 4 Rent LLC.

The Alaska fund, which is managed by a state-owned corporation, is believed to be one of the first public investment arms to sink money into the market for foreclosed homes.

Representatives for American Homes 4 Rent, which is affiliated with Malibu Management of California, didn’t return requests for comment. News of the Alaska deal was first reported by the Juneau Empire.

Back in March, we reported that institutional money was beginning to circle the market for foreclosed homes in the hopes of building a new asset class in single-family homes. We called it a new “Wall Street gold rush” and since then the interest only appears to have grown.

UF Weekend Reads

A dreary looking day in the NYC environs today, but that won’t overshadow birthday celebrations and other good news too cheer! A big shout to all UF members today. Oh, and fight for your right to party. Here then is Sam Forgione’s suggested readings.

 

From The New York Times:

A former managing director of Bain Capital has a telling beef with art-history majors.

From AR:

Hedge fund managers are still leaving their safety zones for emerging markets, even as John Paulson is recovering from his Sino-Forest bet, writes Jan Alexander.

UF Weekend Reads

Nice weather today in NYC. Enjoy it today before Sunday’s deluge. Here’s Sam Forgione’s picks. You can now follow Sam on twitter @samuelforgione

 

From The New Yorker:

Nicholas Lemann explores new books that illustrate the ties between politics and the economy.

From BusinessWeek:

Lazard’s Michele Lamarche takes on the tough task of courting debt-strapped nations.

UF Weekend Reads

A beautiful spring day in the NYC metro area. Let’s Go Mets! Here’s this weekend’s stories courtesy of Sam Forgione.

 

From The New York Times

Jennifer Medina reports that California’s economy is either booming and busting, depending on which city you’re in.

From The Nation

William Greider has some suggestions on how the Federal Reserve can work with politicians to improve the housing crisis.

UF Weekend Reads

Don’t get pranked tomorrow. Remember, it’s April Fool’s Day. Here are the latest Weekend Reads as selected by Sam Forgione.

 

From Fortune:

Hedge fund manager Paul Singer’s hardball approach has benefited Republican candidates as his fund battles in court with nation’s that have defaulted on their debt.

From The Guardian:

Zoe Williams writes about how Stephanie Flanders, the BBC economics editor and a former speechwriter for Tim Geithner, relishes bad news.

Diversity on Wall Street, or a lack thereof

By Matthew Goldstein

The shooting death of Trayvon Martin, an unarmed black teen in Florida, has evoked a lot of debate about race in America and the nation’s attitudes to what it means to be a minority.

There’s been a good deal written that major media organizations were slow to react to this tragic story, in part because there simply aren’t enough minority voices on staff. This point was highlighted recently in a  story in The New York Times

That said, minorities also are underrepresented in the industry I spend most of my time writing about—Wall Street. And while it’s no secret that there are few minorities in the executives suites on Wall Street—there are not that many women, either—it’s worth taking look at some disturbing statistics.

UF’s Weekend Reads

Here is Sam Forgione’s suggested weekend reads. Happy St. Patrick’s Day everyone. The calendar says March but it feels like mid-May in NYC.

 

From Dealbook:

Recent graduates are becoming disenchanted with Wall Street careers. Kevin Roose interviews a college grad, a recruiter, professor, and former Goldman employee support to make his point.

From Fortune:

Mina Kimes takes a look at James J. Wang, the head of the small and wildly successful OceanStone Fund, who she describes as being spectrally mysterious.

Suite Scams revisited

Virtual offices can be a great cost-saver for a solo attorney, a lone accountant or any other professional who can’t afford the expense  of maintaining a separate support staff to run a business. But these outfits, in which a solo professional gets to essentially rent the services of a receptionist, a secretary and conference space, also can provide cover for bad guys bent on doing mischief.

A case in point is Robert Sucarato, a New Jersey man, who was sentenced Friday to 11 years in a federal prison for using a virtual office as a front for an alleged multi-billion hedge fund that bilked investors out of $1.6 million. A few years ago, when I was at BusinessWeek, I wrote about Sucarato long before federal prosecutors were on his trail. The BW story was called “Suite Scams” and it focused on much more than Sucarato and showed how virtual offices were proving to be a useful tool for Wall Street fraudsters with a slick website and a good marketing pitch.

Former federal prosecutors, back when I talked to them, said they were well aware of how  virtual offices were becoming the hallmarks of scams. But they said there was little  they could do to stop it since the due diligence requirements for virtual office operators are minimal.

UF’s Weekend Reads

We’re introducing a new feature on UF: a link to some weekend reads. Here is the first edition complied by Sam Forgione.

 

From The Guardian:

Andrew Balls, head of European investment for PIMCO from its London office, shares similar views on Europe and regulation with his brother, Ed Balls, of the British Labour Party. Brotherly love even extended to one of PIMCO’s major investment decisions: when Bill Gross decided to sell UK government debt in 2010, and Andrew Balls allegedly disagreed with the move, apparently backing his brother’s political status.

From The New Deal 2.0:

An eye for an eye, a rebuttal for a rebuttal. Bruce Judson argues that Jamie Dimon’s vengeful jab at the media for making less money than JP Morgan is unfair. For one, banks are government-backed while media companies aren’t.

PIMCO and BlackRock go strolling down K Street

By Jennifer Ablan and Matthew Goldstein

Wall Street may hate financial regulatory reform, but lobbyists certainly love it—especially ones working on behalf of giant asset managers PIMCO and BlackRock, which control a total of nearly $5 trillion in assets.

Last year, PIMCO and BlackRock both upped their lobbying expenditures in a big way.

The not-for-profit group OpenSecrets.org reports that Bill Gross’s Pacific Investment Management Company spent $450,000 on lobbyists last year, up from $120,000 in 2010. BlackRock’s spending on lobbyists rose to $2.5 million in 2011, up from $1.45 million in the prior year.

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