{"id":5525,"date":"2013-11-15T00:00:00","date_gmt":"2013-11-15T06:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2013\/11\/hedge_funds_are_moving_in_on_m"},"modified":"2022-05-04T14:36:23","modified_gmt":"2022-05-04T19:36:23","slug":"hedge-funds-are-moving-in-on-m","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/hedge-funds-are-moving-in-on-m\/","title":{"rendered":"Hedge Funds Are Moving in on Municipal Debt, Including Puerto Rico Debt"},"content":{"rendered":"

\t\t\t\tAccording to The Wall Street Journal<\/em>, hedge funds are starting to bet big on municipal debt by demanding high interest rates in exchange for financing local governments, purchasing troubled municipalities\u2019 debt at cheap prices, and attempting to profit on the growing volatility (in the wake of so many small investors trying to get out because of the threat of defaults). These funds typically invest trillions of dollars for pension plans, rich investors, and college endowments. Now, they are investing in numerous muni bond opportunities, including Puerto Rico debt<\/a>, Stanford University bond, the sewer debt from Jefferson County, Alabama, and others.<\/p>\n

Currently, hedge funds are holding billions of dollars in troubled muni debt. The municipal bond market includes debt put out by charities, colleges, airports, and other entities. (Also, Detroit, Michigan’s current debt problems, which forced the city into bankruptcy, caused prices in the municipal bond market to go down to levels that appealed to hedge funds.)<\/p>\n

Hedge fund managers believe their efforts will allow for more frequent trading, greater government disclosures, and transparent bond pricing and that this will only benefit municipal bond investors. That said, hedge fund investors can be problematic for municipalities because not only do they want greater interest rates than did individual investors, but also they are less hesitant to ask for financial discipline and better disclosure.<\/p>\n

Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

According to The Wall Street Journal, hedge funds are starting to bet big on municipal debt by demanding high interest rates in exchange for financing local governments, purchasing troubled municipalities\u2019 debt at cheap prices, and attempting to profit on the growing volatility (in the wake of so many small investors trying to get out because […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3752,3748,3922,3951,4039,3755],"tags":[],"class_list":["post-5525","post","type-post","status-publish","format-standard","hentry","category-financial-firms","category-hedge-funds","category-municipal-bonds","category-municipal-securities","category-puerto-rico-bond-funds","category-ubs"],"yoast_head":"\nHedge Funds Are Moving in on Municipal Debt, Including Puerto Rico Debt — Investor Lawyers Blog — November 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