Another View On The Public-Private Investment Fund

On occasion, Zero Hedge has discussed the utility of such programs as the TALF and the Public-Private Investment Fund, all core components of the Financial Stability Plan, which, when first presented by Tim Geithner in Feruary, shocked the capital markets with its alleged insufficiency and opacity.

Here we present the view of Gorelick Brothers Capital, a fund investor, who in their most recent market update notes that it has "reviewed over 140 new fund proposals, mostly from hedge funds, private equity and other money managers. These funds have targeted approximately $70 billion in new capital and have been able to raise about $35 billion to date. This tally excludes private equity firms investing chiefly in commercial real estate loans and equity, as well as distressed debt funds focused on corporate bonds and loans. In the face of overwhelming supply, $35 billion of fresh capital has hardly made a dent in the opportunity."

The report is an interesting insider's perspective of what potential role the TALF and PPIF might serve for any pent up capital demand, and how it may make lives for Fund of Funds somewhat easier, although it is not explicitly clear to Zero Hedge if the TALF will indirectly subsidize FOF capital for investments in asset managers who intend to use the PPIF as an investment vehicle.

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