First purchases of toxic assets under Treasury’s plan

Money manager Invesco Ltd and billionaire investor Wilbur Ross, who made his fortune investing in distressed companies and assets, along with a group of other investors are committing $1 billion to buy toxic bank loans and securities through the U.S. government's Public-Private investment Program (PPIP).

Ross had applied to the government on Friday, and the list of firms chosen will be finalized approximately on May 15 and the purchase of assets will start in June.

It is also known that the terms of PPIP state that the investments of the Ross team would be matched by the U.S. Treasury, and the group could borrow six times that amount through a program backed by the U.S. Federal Deposit Insurance Corp.

Key partners of Ross include Invesco, a fund manager with $159 billion in fixed-income assets, and the LeFrak Organization, a top real estate developer. Some other participating organizations are bond insurer Assured Guaranty Ltd, American Home Mortgage Servicing Inc, Muriel Siebert & Co, New York-based Williams Capital Group and Jackson Securities in Atlanta.

Some critics had stated assumptions that PPIP would simply enrich big investors, and some fund managers did not wish to participate in the program, as it wasn’t clear how profits would be treated.