Hedge-Fund Veterans Do Rare SRT Deal in Emerging-Market Risk.

A group of hedge-fund veterans, led by Newmarket Capital, has agreed to purchase part of the risk on a loan portfolio from the Inter-American Development Bank Group. This transfer of balance-sheet exposure is seen as a new business model that could help multilateral lenders increase lending capacity. The deal, known as Scaling4Impact, allows the IDB to alleviate 10% of mezzanine risk and is part of a broader trend towards synthetic securitizations to boost financial clout and environmental considerations for multilateral lenders. Private investors like Newmarket are showing interest in these structures, signaling a potential shift in risk-return profiles for development lending. [Extracted from the article]