Offshore Fund Eyes Nonperforming U.S. Loans.

New York -- Nonperforming U.S. mortgages have reached the point in the cycle where they are cheap enough to buy, according to at least one asset manager that has started two offshore investment funds to do this.

"We think it's the opportune time," said Jeffrey Kirsch, managing principal of ARE Asset Management. "We think the bottom is approaching and it's vital that we enter the market before we hit a bottom."

Several new funds have been formed recently to capitalize on the "low" prices in portions of today's liquidity-strapped market and there has been some question as to whether this might help or be a sign of market recovery.

When asked what differentiates ARE's new Tortola, British Virgin Islands-based funds from mortgage-related investment vehicles, Mr. Kirsch noted that ARE has ownership in a retail originator and servicer and probably has "as much experience in the acquisition and liquidation of nonperforming mortgages as anyone.

"That has been our niche," said Mr. Kirsch, who has been acquiring and resolving nonperforming mortgages on behalf of non-domestic private investment funds and individually managed accounts since 1996.

ARE's originator is Seattle-based Go Solutions, which it started in January and which specializes in resale to the agencies, he said.

Its servicer is the Plano, Texas-based loss mitigation and default specialist SRG (Strategic Recovery Group LLC), which it started about 18 months ago, Mr. Kirsch said.