Fund Manager Launches Subprime Startup
Hedge fund manager Daniel Zwirn and Westaim Corp. completed a deal to create Arena Finance Co., to provide and invest in subprime auto loans, among other credit segments.
Westaim, a publicly traded Canadian investment company, announced last week it had established and capitalized the operations with about $180 million, to originate, acquire, hold, and possibly sell “asset-oriented credit investments” that could be sold as asset-backed securities.
Besides subprime auto loans, other examples include charged-off consumer obligations, consumer bills, consumer receivables, product-specific purchase finance, residential mortgages and tax liens, Westaim said.
Zwirn is chief executive and chief investment officer of Arena Finance Co. Zwirn got some unwanted notoriety because his old company, D.B. Zwirn & Co., was involved in a high-profile case coming out of the recession.
The Securities and Exchange Commission filed a civil suit in 2011 against Perry A. Gruss, the firm’s former CFO, alleging aiding and abetting fraud in connection with the improper transfer of client cash. D.B. Zwirn & Co. closed, the SEC said.
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