WASHINGTON, April 3 (Reuters) – Another of the
public-private investment funds set up amid the 2007-09
financial crisis to take bad assets off banks’ books said on
Tuesday it was winding up operations.
Invesco Ltd said it has returned substantially all
the proceeds, at a profit, from its Invesco Mortgage Recovery
Fund that it jointly owned with the Treasury Department.
Treasury will receive $221.2 million including $3.4 million
in proceeds from warrant sales, in addition to a previously
distributed $497.9 million. That amounts to a rate of return of
18.3 percent since the fund’s beginning in October 2009, Invesco
said.
In March, the fund repaid the last of the $1.2 billion in
loans that Treasury put up over the life of the fund.
The Public-Private Investment Program, or PPIP, was
announced in March 2009 by the Treasury department as a way to
provide liquidity that could be used to soak up so-called “toxic
assets” from the sheets of financial institutions that were
struggling at the time.
Essentially, private investors partnered with the
government, using some funds from the Troubled Asset relief
Program, to take bad assets off banks’ books.
As well as Invesco, UST/TCW Senior Mortgage Securities Fund
L.P. was wound up and liquidated during the first quarter of
2010. The Treasury Department said that it made a profit of
$20.1 million on its $156.3 million equity investment in UST/TCW
Senior Mortgage Securities Fund.
Seven out of the nine PPIP funds are still actively
investing so the Treasury Department says it cannot estimate its
final return on the program. To date, Treasury has disbursed
about $18 billion for PPIP and has recovered $4 billion through
repayments, gains and interest.
