How to heal a paper cut
London-based hedge fund manager Solent Capital hit the headlines in August after its SIV-lite, Mainsail II, became a victim of the liquidity squeeze in the commercial paper market, and was forced to wind down. However, the manager is looking to take advantage of current market conditions with a new distressed debt fund. By Radi Khasawneh
It's been a torrid time for structured investment vehicles (SIVs), SIV-lites and asset-backed commercial paper (ABCP) conduits. Concerned about potential exposures to US subprime mortgage securities within these vehicles, skittish investors all but disappeared from the short-term money markets in August. This left SIVs and conduits, which finance their purchase of highly-rated debt (including asset-backed securities and collateralised debt obligations) through the issuance of short-term
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