The New Bankers

Hedge funds have what many banks are lacking these days: liquidity. Once considered a last resort for troubled companies, hedge funds have stepped into the breach as financiers even for large and stable companies because commercial and investment banks aren’t lending like they used to. “We pride ourselves on being able to provide a SWAT team with all available resources,” says Richard Ronzetti of New York’s Marathon Asset Management.

July 23, 2008

Twitter
LinkedIn
Pinterest
Tumblr
Copy
Link copied
Print
Email

For years E*Trade Financial Corp. invested a good chunk of its capital in collateralized debt obligations. It seemed like a great way for the online brokerage firm to generate balance-sheet gains: Interest rates were falling and real estate prices were rising, driving up CDO values.

To continue reading, subscribe now to Premium Journalism. Already a subscriber? login.