Fri, Aug 28, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Student loans, mortgages, regulation offering opportunity for credit hedge funds

Monday, May 13, 2013

Bailey McCann, Opalesque New York:

First it was mortgages, now student loans are gaining the attention of hedge funds focused on finding returns in credit. Student loan debt which is hitting all time highs as tuition increases and more people get advanced degrees hoping for a better job market when they emerge from school. However, the rate of student loan default is also on the rise as the job market hasn't been all that welcoming to recent graduates. Taken together, some funds are eyeing a new opportunity set - shorting student debt.

"The growth in the student loan sector has been growing since the crisis. Without any new subprime mortgage origination, there is now more student loan debt outstanding than subprime mortgage," says Chris Hentemann, Managing Partner at New York-based 400 Capital, a credit focused hedge fund. He spoke with Opalesque after speaking on a panel during the Skybridge Alternatives (SALT) Conference in Las Vegas.

"We learned from the subprime crisis that homeownership is a privilege not a right. The same may be true with education as the price of that asset keeps going up. Who can manage that debt?" Hentemann says. "The current employment environment is not absorbing the new graduates and we are seeing that borrowers are not finding the jobs needed to repay the debt. You can see a correction occurring as delinquencies and defaults rise."

Sallie Mae, one of the largest providers ......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Commodities - Commodity hedge funds lose most in three years as rout deepens, Funds bet on Shell deal as oil prices plunge[more]

    Commodity hedge funds lose most in three years as rout deepens From Bloomberg.com: Hedge funds betting on commodities lost the most in almost three years in July as the price-rout deepened. Funds lost money for a third month, according to the Newedge Commodity Trading Index, which was re

  2. Investing - Hedge funds suddenly find real money is back in Argentina's debt, Elon Musk buys more SolarCity stock following hedge fund manager short, BlackRock plans to get into rental-home financing[more]

    Hedge funds suddenly find real money is back in Argentina's debt From Bloomberg.com: The real money is back in Argentina. Before the country’s default in July 2014 (its second in 13 years), most long-term investors abandoned its bond market. As they rushed out, Argentina became a favorit

  3. JTC acquires Kleinwort Benson’s fund administration business[more]

    Bailey McCann, Opalesque New York: JTC has completed the acquisition of Kleinwort Benson’s fund administration business, boosting assets under administration (AuA) to $56 billion. Kleinwort Benson is based in the Channel Islands, South Africa. The transaction, which relates to the whole of K

  4. Performance - Hedge funds set to bank millions by short selling during London share slump, The China market chaos has made this hedge fund its most money in 2 years, Odey hedge fund said to surge 9% betting against China, Hedge funds with long-held bearish views on China rack up profits, Hedge funds in U.S. seen curbing damage from August turbulence, Hedge funds collect on their predictions of a fall, How did managed futures do while the Dow was down 1000[more]

    Hedge funds set to bank millions by short selling during London share slump From TheGuardian.com: Hedge funds are set to bank tens of millions of pounds from the slump in share prices in London, having bet almost £18bn that the FTSE 100 would fall. The funds making the bets include Lansd

  5. Opalesque Exclusive: John C Head IV leaves alternative investment firm Gallery Capital, David Harrison joins as co-CIO[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: John C Head IV, former president and co-founder of Gallery Capital Management, an alternative inv

 

banner