Treasury Says Three More Money Managers Receive PPIP Funding
The U.S. Treasury Department said AllianceBernstein Holding LP, BlackRock Inc. and Wellington Management Co. have raised a combined $1.94 billion for their funds participating in the U.S. effort to buy toxic assets from banks.
By getting that money from private investors, the three firms qualify for federal funds under the Public Private Investment Program. The U.S. will match the funds each money manager raised, and provide debt financing that will give them a combined purchasing power of $7.74 billion.
The program, known as the PPIP, is a scaled-down effort to spur the purchase of devalued real-estate loans and mortgage- backed securities that weighed on banks’ balance sheets and helped cause the financial crisis. The Treasury once envisioned the partnerships buying as much as $1 trillion of the assets.
“The PPIP continues to grow,” Herb Allison, assistant Treasury secretary for financial stability, said in a statement. “Private capital is being drawn into the market for legacy securities, and taxpayers are being given a chance to share in the profits.”
Last week, Invesco Ltd. and TCW Group Inc. became the first two companies in the PPIP to announce initial closings of their funds. Using the federal financing, the five partnerships will have about $12.3 billion in capital.
The department said it expects the rest of the partnerships to announce closings throughout October.
After the initial closings, the funds will be able to have two more rounds of investment over the next six months that will be eligible for the Treasury’s matching equity and debt.
Treasury Secretary Timothy Geithner has committed as much as $30 billion in funding for PPIP from the $700 billion Troubled Asset Relief Program enacted a year ago.
Filed under: money by Finance Boss