Ross Perot’s Hedge Fund Loses Big on Commercial Mortgage Backed Securities

The Wall Street Journal is reporting that several prominent hedge funds including one run by the family of H. Ross Perot (presumably with Ross’ billions), have sustained major losses due to the recent deterioration of the commercial real estate mortgage bond market. Andy Stone’s fund, Petra Capital, is also among the unfortunate firms that made big bets in CMBS. Mr. Stone, you may recall, is one of the guys who invented CMBS way back when. (I know, it’s Ironic) These funds and others are dumping commercial real estate debt in-order to meet margin calls from their brokers who lent them copious amounts of money to buy the bonds. Commercial mortgages have fared much better than their residential counterparts, but this news does not bode well for the asset class.
Check out the full story on the WSJ website.

Privately funded commercial mortgage loans are not dependant on the secondary mortgage bond market. Our firm is still making deals and closing loans using private funding sources rather than banks, insurance companies or Wall Street brokers.

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