Litigation

Hedge Funds and Structured Settlements

By John Darer

It's no secret that hedge funds are direct purchasers of structured settlement payment rights and/or securitizations of structured settlement payment rights issued by factoring companies or their holding companies.

By lumping structured settlements in with the stinko "investment d'annee", real estate loans, one journalist would have you believe that somehow structured settlements had a role in bringing a hedge fund value at US$6.5B last June down to a paltry US$650M.

In Sunday's New York post, Teri Buhl has penned a story about Sage Crest II, a crashing hedge fund that is about to be bailed out by Fortress Investment Group, which purportedly taught former Presidential candidate and former Senator John Edwards a thing or to about finance. Buhl says the seven year old fund, promise investors lofty returns "by making art, real estate and structured settlement based loans"

One source reported by Buhl was quote a saying that "half the book is worth zilch to 10c on the dollar". Readers should know that the half the book being referred to could not be the structured settlement part. With Peach Holdings subsidiary, Peachtree Settlement Funding charging tort victims and profoundly injured people high teens discount rates on cash flows on AA to AA rated paper, let's call a spade a spade.

Full post as published by Structured Settlements 4Real on April 27, 2008 (boomark / email).