Standish Mellon Asset Management Co. LLC, the fixed-income unit of BNY Mellon Asset Management, says it will offer investment strategies that enable clients to invest in securities related to the Term Asset-Backed Securities Loan Facility (TALF). Standish is initiating these strategies because of strong expressions of interest from its clients, and it expects to begin investing client money by early July.
‘We believe that investors who are the early buyers of asset-backed securities (ABS) in the TALF program have the potential for the biggest gains,’ says Desmond Mac Intyre, president and CEO of Standish. ‘As more money flows into these investments, the overall spreads should tighten, and the opportunities for strong returns will diminish. However, it is important to remember the TALF program is essentially a buy-and-hold strategy, which is dependent on strong up-front securities selection and price discovery."
Standish will create two separate investment strategies. The first will target new issues of consumer ABS and commercial mortgaged-backed securities (CMBS). The second is designated as an "Expanded TALF" strategy that will include legacy assets, such as non-agency CMBS, consumer ABS and non-agency residential mortgaged-backed securities (RMBS).
‘We view the TALF initiative as having the potential to be the most successful of the government programs aimed at resuscitating financial markets,’ adds Tom Graf, managing director of structured products and global workout solutions. ‘It is among the least expensive programs, has already established strong momentum and continues to have growing participation."
SOURCE: Standish Mellon Asset Management