In an attempt to get rid of as much as $40 billion in distressed assets from the financial sector, the US Treasury has appointed BlackRock, Invesco and seven other financial companies for its Public- Private Investment Program (PPIP) – reported Bloomberg.
GE Capital Real Estate, Marathon Asset Management, Alliance Bernstein, Oaktree Capital Management, RLJ Western Asset Management, TCW Group and Wellington Management are the other firms chosen for the purpose. The Treasury said in a statement that it would pump $30 billion, while the selected financial firms may invest the remaining $10 billion.
The firms selected must work on the Legacy Securities Program, and supply at least $20 million from their own capital and raise a minimum of $500 million from private investors within 12 weeks.
Joseph Parsons, President and CEO of GE Capital Real Estate, said: “The combination of private and public sector investments has the potential to make a significant impact on the market for legacy securities.”
The Treasury said that the PPIP funds will be used to purchase securities from sellers qualified under the TARP law. However, the sellers must be based in and regulated in the US and not owned by a foreign entity, except under some special circumstances related to failed firms.
