Another investment group has been approved to partner with the Treasury Department in buying distressed housing-related assets.
RLJ Western Asset Management LP is the latest of seven investment groups to join the Public-Private Investment program. The partnership is controlled by Robert L. Johnson -- best known as the founder of the BET television network and as the owner of the Charlotte Bobcats professional basketball team -- and by Western Asset Management, an affiliate of Legg Mason Inc.
Details of the agreement weren't released, but investors must commit a minimum of $500 million in order to participate. Under the terms of the PPIP program, the Treasury will match private investments in the program and provide additional financing at low cost.
So far, seven firms or partnerships have joined the program, raising a total of $4.09 billion in private-sector capital. The Treasury Department's matching investment and loan guarantees bring the program's total purchasing power to $16.36 billion, the government said.
Creating a market for housing-related assets has been a primary goal for the Treasury since the credit markets froze up late last year. By backing loans used to buy them, the government hopes to move them off the books of traditional banks and free them up to resume normal lending activity.
Nevertheless, the PPIP program has come under fire as demand for the securities has improved since last year's the financial meltdown. Some critics have questioned whether the assistance amounts to a giveaway to the financial industry.
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