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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Jay Scott who wrote (6686)9/24/1998 7:48:00 PM
From: Henry Volquardsen  Respond to of 9980
 
Hi Jay,

I heard those terms earlier in the day and think it was done to give the LTC staff the incentive to continue to manage the portfolio. If there was no incentive then they would just shut down the positions at whatever prices were available and the banks wouldn't have an opportunity to recoup some of the losses. FWIW the 15% is less than they used to get. The previous deal gave them 2% of assets and 20% of performance.

I guess it is possible they intend to keep LTC operating but that was not the talk I heard in the market today. I am sure we will hear more details in the next few days.

Henry



To: Jay Scott who wrote (6686)9/24/1998 7:51:00 PM
From: Zeev Hed  Read Replies (2) | Respond to of 9980
 
Jay, of course it was "orderly liquidation", the original investors are left with 10cents on the dollar invested. The "new investors" own 90% of the fund, and according to Weil (on NBR), the new investors ($3.6 billions of which Travelers put up $300 MM) are buying at 1/10 of what the portofolio cost was (well, whatever that means in a hedged situation).

Zeev


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