The fixed-income manager Standish Mellon Asset Management Co. LLC, a Bank of New York Mellon Corp. unit, said it plans to introduce investment strategies to let clients invest in securities related to the Federal Reserve Board's Term Asset-Backed Securities Loan Facility.
Desmond MacIntyre, the Boston firm's president and chief executive officer, said it is launching these strategies because of "strong interest" from clients.
"We have a fiduciary objective to bring opportunities like this that are unique to our clients," MacIntyre said in an interview last week.
The strategies are expected to be available by early July.
Standish will focus on institutional clients in distributing the strategies, MacIntyre said.
"They are available to individuals through separately managed accounts, but that is only for the brave," he said. "In terms of structuring these products for retail investors, it will be a lot more complex, but we are confident that there will be healthy returns over time."
Standish, which had $55 billion of assets under management on April 1, will create two separate Talf investment strategies.
The first will target new issues of consumer asset-backed securities and commercial mortgaged-backed securities.
The second Talf strategy, an expanded one, will include legacy assets such as nonagency commercial mortgage-backed securities, consumer asset-backed securities and nonagency residential mortgaged-backed securities.
MacIntyre said he expects investors to generate $250 million to $300 million from the first strategy and up to $500 million from the second.
"We believe that investors who are the early buyers of asset-backed securities in the Talf program have the potential for the biggest gains," he said.
Tom Graf, the managing director of structured products and global workout solutions for Standish, said he expects investors to generate returns of 10% to 12% on the first strategy and "north of 15%" on the second.
"We are being very conservative with those estimates, at least for now," Graf said in an interview last week.
MacIntyre said that a number of questions remain about the Talf program, and that Standish will proceed cautiously.
"We are going to participate on a deal-by-deal basis," he said. "There will be occasions where we do not think it advisable to invest, and we will not put capital to work in those instances."
