Providence Investment: Many Value Opportunities in MBS Market

Providence Investment Management, a hedge fund management firm, which focuses on Mortgage-backed arbitrage Strategy (MBS), believes that the market from which it bases its hedging strategy can offer better returns. In 2011, Providence was one of the best performing hedge funds. The firm reported a return of 20.5% on its $1.3 billion worth of assets under management. The fund is up approximately 1% this year.

The company points to the deteriorating mortgage and U.S treasury rates, which have hit an all time high in the recent past, as a major reason for the reduced...