Some 100 firms applied for the role. The chosen nine are:Alliance Bernstein, with sub-advisers Greenfield Partners andRialto Capital Management; Angelo Gordon and GE Capital RealEstate, which are partnering; BlackRock; Invesco; Marathon AssetManagement; Oaktree Capital Management; RLJ Western AssetManagement; Trust Company of the West; and Wellington ManagementCo.

With these selections in place, the market will finally get asense of one of the program's missing pieces: its eventualfinancial capacity. The nine fund managers have three months toraise $500 million in capital each from private investors. Treasuryis matching that equity as well as providing debt financing up to100% of the total equity raised. The fund managers have the optionof raising more than $500 million, but there is no assurance thatTreasury will match amount over that threshold.

Even before the fund-raising begins, however, it is clear thatPPIP will not have the same appetite as its original unveilingsuggested. Now the plan is expected to buy as much as $40 billionin assets; original projections suggested it would have to take onas much as $1 trillion. Treasury will invest up to $30 billion inthe program--an amount much smaller than the $100 billion the Obamaadministration initially envisaged.

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Erika Morphy

Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.