Angelo Gordon Gains 20 Percent in CMBS Fund
Angelo Gordon & Co., the $25 billion firm started by John Angelo and Michael Gordon, posted a 20 percent gain this year in a fund invested in commercial mortgages, according to a letter to investors obtained by Bloomberg.
The AG REDI Ltd. fund increased 7.2 percent as “the absence of any major negative surprises out of Europe or the rest of the world helped create a backdrop of stability,” the New York-based firm said in the letter, dated Oct. 8 and signed by Angelo and Andrew Solomon, head of commercial real estate debt and portfolio manager. Solomon declined to comment on the letter.
The Federal Reserve’s third round of debt purchases aimed at boosting the U.S. economy will indirectly boost commercial mortgage-backed securities, Angelo Gordon said in the letter.
“This latest round of quantitative easing includes the promise to keep rates low for a considerable period of time and a commitment to purchase agency mortgage-backed securities at a pace of $40 billion per month,” Angelo and Solomon said in the letter. “While these policies do not directly affect CMBS, they do have a meaningful indirect impact.”
Low Treasury rates and an increasingly crowded market with increased competition for residential mortgage-backed securities make commercial mortgages attractive, Angelo Gordon said.