November 27, 2007
ME could recoup $20M investment loss
The state will get back most of the $20 million it lost in a risky subprime investment, says State Treasurer David Lemoine.
In August, Maine invested $20 million, or about three percent of the state's investment portfolio, in Mainsail II, a fund run by U.K.-based Solent Capital Partners that held corporate bonds backed by subprime mortgages, according to the Blethen Maine News Service. A longtime financial advisor from Merrill Lynch recommended the investment, but about halfway through Maine's 23-day investment period the fund's assets were frozen by Bank of New York.
Lemoine yesterday said the state is in a priority position to be paid back the money, plus interest, because investors have made offers to buy the fund's assets, the news service reported. He did not say when that might happen. However, Lemoine noted there is a possibility the state will only be paid back 85% of the money, and lose about $3 million.
In August, Maine invested $20 million, or about three percent of the state's investment portfolio, in Mainsail II, a fund run by U.K.-based Solent Capital Partners that held corporate bonds backed by subprime mortgages, according to the Blethen Maine News Service. A longtime financial advisor from Merrill Lynch recommended the investment, but about halfway through Maine's 23-day investment period the fund's assets were frozen by Bank of New York.
Lemoine yesterday said the state is in a priority position to be paid back the money, plus interest, because investors have made offers to buy the fund's assets, the news service reported. He did not say when that might happen. However, Lemoine noted there is a possibility the state will only be paid back 85% of the money, and lose about $3 million.
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