DAC Management, a hedge fund based in Hong Kong, is raising US$500 million to purchase thousands of non-performing loans that it anticipates will arise from the mainland government’s lax credit policies in 2009, reports the South China Morning Post. DAC already has US$400 million assets under management, which include over 45,000 loans it has purchased from mainland lenders. After purchasing the distressed debt, DAC will either restructure the loans or seize the underlying assets that serve as collateral. Phil Groves, the fund’s managing director said, "We can better harvest cash from troubled situations than current [debt] holders who have bigger and better things to deal with." Mainland banks lent a record US$1.4 trillion last year.
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