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From Komfie Manalo, Opalesque Asia:

With global initiatives geared towards stricter banking regulations, hedge funds are being presented a very unique opportunity to take up the slack in the lending industry.

This was pointed out by Joseph Taussig, Founder of Taussig Capital AG, a firm that partners with hedge funds to raise permanent capital by creating banks and insurance companies (ie, Greenlight Re), who said that commercial lending offers an exciting opportunity, most specifically to small and medium-sized businesses.

"You have your lowest loan-to-values and your highest spreads almost through business history right now," Taussig told participants at the recent Opalesque Zurich Roundtable.

In fact, he said Taussig Capital is currently in discussion with several asset-based lending funds to convert themselves to banks to gain access to cheap capital and to modestly leverage the spreads.

He further explained, "We are working to create another bank right now which will provide liquidity to the 100 or 200 asset based lending funds that have in aggregate about $100 to $200bn locked up in gates right now, so that they can pay back and redeem their investors, continue to earn fees on the loans, and then re-lend once loans have been repaid. All of this has been a real problem in an industry that we think ......................

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