A play on the sub-prime bust

Dean Foust

I mention this not to offer investment advice, nor to shill for this firm (I, for one, wouldn’t invest in 99% of hedge funds out there, given their lack of transparency and lack of investment history). I cite this only as the latest phenomenon in post-modern real estate: Lahde Capital, a hedge fund located in Santa Monica, recently opened three new funds – U.S. Residential Real Estate Hedge I, II and V – that are designed to profit from the presumably impending collapse in the sub-prime market. The funds will all employ similar strategies: Taking short positions in the riskiest tranches of sub-prime mortgage securitizations. The only differentiation is that the funds use different levels of leverage, with fund “V” maxing out at five times leverage. (Credit to FINalternatives for spotting this development.)

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