'Vulture Investors' See New Prey in MF Global (MFGLQ) Claimants
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And so the vultures swoop.
According to the NY Post Friday, the assets of defunct MF Global (OTCBB: MFGLQ) are now becoming too juicy to pass up...if you're a hedge fund.
The report has funds including Longacre Fund Management, Elliott Management, Triax Capital Advisors and Contrarian Capital already placing calls to MF, hoping to grab some goodies at a discount price.
Known as "vulture investors," firms like Longacre and Triax earn a living by acquiring things like rights to money owed to MF customers. They cash in by offering a discounted price for the assets, and then hope to reclaim more than paid.
Sources have said offers came in for 80 cents to 85 cents on the dollar, suggesting anticipated returns of 90 cents per dollar or more.
Some investors have been irked by the calls, with some simply hanging up the phone before the bids were even mentioned.
Though it's only been a month-and-a-half since MF went belly-up, investors have to wonder whether they'll get anything above 90 cents back. Unlike equity accounts, those for commodities and futures don't have insurance plans, meaning investors will bear the full-weight of losses if they're not kept separate. Aside from missing client money, that is the biggest problem MF is facing.
The trustee to MF Global, James Giddens, is said to have paid out 72 cents per dollar to investors through Thursday, remarkable time considering the events.
But, despite the payments, some vulture investors still believe clients will get nervous and take anything. One Triax Capital employee quoted in the NY Post said, "I expect a lot of people to be transacting in the next couple of months once there’s more transparency in this case."
According to the NY Post Friday, the assets of defunct MF Global (OTCBB: MFGLQ) are now becoming too juicy to pass up...if you're a hedge fund.
The report has funds including Longacre Fund Management, Elliott Management, Triax Capital Advisors and Contrarian Capital already placing calls to MF, hoping to grab some goodies at a discount price.
Known as "vulture investors," firms like Longacre and Triax earn a living by acquiring things like rights to money owed to MF customers. They cash in by offering a discounted price for the assets, and then hope to reclaim more than paid.
Sources have said offers came in for 80 cents to 85 cents on the dollar, suggesting anticipated returns of 90 cents per dollar or more.
Some investors have been irked by the calls, with some simply hanging up the phone before the bids were even mentioned.
Though it's only been a month-and-a-half since MF went belly-up, investors have to wonder whether they'll get anything above 90 cents back. Unlike equity accounts, those for commodities and futures don't have insurance plans, meaning investors will bear the full-weight of losses if they're not kept separate. Aside from missing client money, that is the biggest problem MF is facing.
The trustee to MF Global, James Giddens, is said to have paid out 72 cents per dollar to investors through Thursday, remarkable time considering the events.
But, despite the payments, some vulture investors still believe clients will get nervous and take anything. One Triax Capital employee quoted in the NY Post said, "I expect a lot of people to be transacting in the next couple of months once there’s more transparency in this case."
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