It will also be qualified as a REIT, so ownership of common stock by any person is generally limited to 9.8% in value or in number of shares.  It will also be externally managed by Federated Investment Counseling, an indirect wholly-owned subsidiary of Federated Investors Inc. (NYSE:FII).   

Point Asset Management, Inc. is a Maryland corporation that will invest predominantly in agency mortgage-backed securities such as Fannie Mae, Freddie Mac, or Ginnie Mae. It will also be externally managed and advised by Federated Investment Counseling as noted above.

Simultaneously with the completion of this offering, FII Holdings will purchase $25 million of our common stock at the initial public offering price per share in a private placement.  So far, Federated is still down 2% at $41.31.  With a $4.1 Billion market cap, there may be only so much a $250 million IPO can add even it hits all its new investments in mortgages as home runs.

We are careful in calling all of these new mortgage funds "vulture funds" but we also like to call it like we see it.  We also don’t fault vulture funds, and in fact we even like them.  Here are some others:

• We were favorable on Chimera Investment (NYSE: CIM) from even before the start of its IPO because it is essentially the same sort of vehicle (in theory) and is run by Annaly Capital Management, Inc. (NYSE: NLY).
• MFA Mortgage Ready To Go Vulture Investing In Mortgages.
• Blackstone (NYSE: BX) pursues the same strategy, sort of.

Jon C. Ogg
February 29, 2008