Noting that transition will take time, Bass and Canter advocate that the greatest chance of success will depend on the development of multiple private-capital based options to provide the broadest and deepest investor base. They note that there is secular demand for income producing assets like first loss mortgage risk from longer-term investors such as pension funds, sovereign wealth funds and insurers with longer-duration liabilities.
In conclusion, Bass and Canter emphasize that "quality" of housing finance, or the long-term stability, should not be sacrificed for "quantity," or lower mortgage rates achieved through increased leverage in the system, noting that in the past the result was an unacceptable degree of volatility in home prices. "The process of bringing private capital into the mortgage market will take time," say Bass and Canter. "If these changes are well communicated and the market is structured appropriately, we believe that there is a deep investor base that is ideally positioned to invest in first-loss mortgage risk over the long term."
You can access the white paper "Increasing the Role of Private Capital in the Mortgage Market" by clicking here.
Cautions Regarding Forward-Looking StatementsCertain statements provided by management in this news release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. The most significant of these factors include, but are not limited to, the following: the performance of financial markets, the investment performance of sponsored investment products and separately-managed accounts, general economic conditions, industry trends, future acquisitions, competitive conditions, and current and proposed government regulations, including changes in tax regulations and rates and the manner in which the earnings of publicly-traded partnerships are taxed. AllianceBernstein cautions readers to carefully consider such factors. Further, such forward-looking statements speak only as of the date on which such statements are made; AllianceBernstein undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. For further information regarding these forward-looking statements and the factors that could cause actual results to differ, see "Risk Factors" and "Cautions Regarding Forward-Looking Statements" in AllianceBernstein's Form 10-K for the year ended December 31, 2010 and subsequent Forms 10-Q. Any or all of the forward-looking statements made in this news release, Form 10-K, Form 10-Q, other documents AllianceBernstein files with or furnishes to the SEC, and any other public statements issued by AllianceBernstein, may turn out to be wrong. It is important to remember that other factors besides those listed in "Risk Factors" and "Cautions Regarding Forward-Looking Statements", and those listed above, could also adversely affect AllianceBernstein's financial condition, results of operations and business prospects. About AllianceBernstein AllianceBernstein is a leading global investment management firm that offers high-quality research and diversified investment services to institutional investors, individuals and private clients in major world markets.
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