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D.E. Shaw to Start Fund to Buy Europe Bank Loans, Mortgages

D.E. Shaw & Co., the $26 billion New York-based hedge fund that uses computer models to pick trades, plans a fund whose investments will include European loans.

The Alkali Fund, which will start in July, will invest in residential mortgage-backed securities, consumer asset-backed debt, troubled loans, credit extensions to borrowers who do not have access to bank financing, and corporate credit, according to a document dated April 2012 that was obtained by Bloomberg News. The Alkali Fund will be managed mostly by D.E. Shaw’s asset-backed securities team, with some help from the corporate-credit managers, according to the document.