Securities that are backed by subprime home loans issued during the housing boom are worthwhile investments to institutional mortgage-bond buyers. said Steve Kuhn, head of fixed-income trading at the hedge fund Pine River Capital, in an interview on Bloomberg today.
“Almost to a person, everyone who’s a serious analyst in this market thinks they are cheap if you can hold the bonds to a three-to-five year horizon.” said Kuhn, “The concern is maybe they can get cheaper.” Kuhn’s Minnetonka, Minnesota-based firm oversees $5.4 billion and invests in mortgage debt.
According to Bloomberg, Marathon Asset Management’s Bruce Richards also focuses on the $1.1 trillion market for non-agency U.S. mortgage securities which don’t have government backing. (Click here to see the full entry)