ABL strategy rocked by US fraud case may mean greater demand for due diligence
One of the better-performing strategies this year has been asset-backed lending. In the US an investigation into alleged fraud that has severely impacted some hedge funds using the strategy has knocked investor confidence. Stephen Quigley talks with managers who still see value in using the strategy now and in the future
Asset-backed lending (ABL) as a strategy for hedge funds has fared better than some other strategies over the past few months. It has been growing in popularity as credit market upheaval has forced banks to tighten lending, giving hedge funds a new opportunity.
Corporates are turning to hedge funds for financial support. They are seen as efficient vehicles to originate and service short-term loans.
For ABL most hedge funds use cash reserves and issue loans on collateralised assets to small to
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