The chief investment officer at hedge fund firm Libremax Capital is planning to start a new fund that will invest in private student-loan debt.
Bloomberg Businessweek reported that Greg Lippmann’s new fund, which will stop accepting new capital in the first quarter of 2014, will aim to buy debt whose borrowers are 65 months or more into repayment.
In a November presentation by Libremax that was obtained by Bloomberg, the hedge fund said that it “believe[s] there is a significant investment opportunity in the private student-loan market. These distressed assets…remain fundamentally undervalued.”
The size of the student-loan market is about $1 trillion, while the size of the fund’s investment universe is about $10 billion of student loans issued between 2005 and 2007.
Based in New York, Libremax specializes in structured credit.