Private funds positive about TALF plan

WASHINGTON, March 6 (UPI) -- Investment funds have reacted positively to a federal plan to entice them to buy revolving debt securities, a leading trade association said.

"Our members have significant interest," in the program known as the Term Asset-Backed Securities Loan Facility, said Richard Baker, president of the Managed Funds Association, The Washington Post reported Friday.

Pension funds have also shown an interest in the program but as many of these are banned from borrowing funds for investments, their future in the program is uncertain, the Post said.

The plan involves government loans to spur purchases of securities, with wealthy hedge funds risking their investment but no more than that.

The government's aim is to draw private funds into the bailout effort, offering hedge funds a chance to profit in a plan where the government's goal is to free frozen credit markets.

Using a public-private partnership, the government is turning to funds that made considerable profits in past years to sweeten their efforts to free credit for student loans, credit cards and auto loans.

"The plan recognizes that our industry can bring significant resources to bear," Baker said.