All together, BlackRock, Wellington Management and AllianceBernstein raised commitments of $1.94 billion. Treasury is now matching that amount with $1.94 billion, as well as providing debt financing. The total purchasing power will be $7.74 billion. Under the program, each of the asset managers were expected to raise a minimum of $500 million, which would be matched by equity and debt financing.
Last week Invesco Ltc and TCW Group closed their own commitments for a collective total of $1.13 billion. With the Treasury match, the duo will have $2.26 billion in equity, for a total of $4.52 billion in debt and equity capital commitments. All together this activity translates into $12.27 billion in purchasing power for so-called legacy assets--the polite term for under water or toxic assets now--in the private sector.
More commitments are expected from the other--nine in total--asset managers selected to participate in the program. With PPIP clearly underway now the next big question is whether--and at what price--holders of these assets will be willing to sell them.
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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.
