To capitalize on Wall Street’s woes, Fortress Investment Group is considering adding another $1 billion to its coffers, the New York Post reports.
The U.S.' first publicly traded hedge fund is aiming to raise the extra cash on top of the $2 billion so-called "credit opportunities" fund it has been marketing to investors since January to invest in distressed assets.
Fortress' fund likely will look to purchase debt including securities such as mortgage-tainted collateralized debt obligations and leveraged loans that have been stuck on bank balance sheets and have plunged in value.
Writedowns in soured debt total about $400 billion at financial firms.
Some investors, however, still see potential value in the assets, which have been trading at deep discounts. Last summer Deutsche Bank, Citigroup, UBS and Merrill Lynch were jammed with hundreds of billions in debt on their books, which prevented them from doing future business.
That backlog has been reduced by more than $90 billion—but that still means billions in assets still need to be unwound.