The PPIP has been widely presented as a steal for investors, with the only risk being that government will change the rules. Are people oversimplifying?
I think they are oversimplifying. The fundamental risk that you're taking is these are difficult securities to analyze and therefore the risk that you're running is that you pay too much for them. That doesn't change because the government made you a loan. In fact, what it means is that you have a little less margin of error because of the risk the lending ends up on top of you.
You've said you'll invest $1 billion in this program. Is that leveraged or unleveraged?
That's unleveraged.So could you lose the whole billion? Conceivably, sure. How much could you make? That remains to be seen. How much are you targeting? If we give that out then we'll pretty well give out what our bids will be and that wouldn't help us in the process. What assets are you especially interested in? All the real estate assets: the commercial mortgage backed securities, the residential mortgage backed securities, commercial whole loans, whole, residential mortgage loans, construction and development loans. In any particular order? Any parts of the country you'll be focused on? The whole strategy was to put together a big enough group of talent and knowledge to be able to bid on whatever comes into the market.