Federal regulators have picked securities affiliates of two insurers to help the government manage and dispose of real estate assets acquired from troubled financial institutions.

The Treasury Department is including the insurer affiliates on a list of companies that will help it invest up to $30 billion in a Legacy Securities “Public-Private Investment Program.”

Treasury officials say the Legacy Securities PPIP will start by participating in the market for commercial mortgage-backed securities, or CMBS, and non-agency residential mortgage-backed securities, or RMBS.

AllianceBernstein L.P., New York, an affiliate of AXA S.A., Paris, will be one of the companies acting as primary managers. AllianceBernstein will handle that role with help from sub-advisors Greenfield Partners L.L.C. and Rialto Capital Management L.L.C.

AXA is the parent of AXA Equitable Life Insurance Company, New York.

Regulators chose the Jackson Securities L.L.C. subsidiary of Atlanta Life Financial Group Inc., Atlanta, to be one of 10 firms that will fill “partnership roles” designed for small businesses, and for businesses owned by veterans, women and minorities.

Atlanta Life sells group life insurance and has a general agency business. Along with Jackson Securities, it has an asset management arm that manages $1 billion in public equity.

PROGRAM MECHANICS

AllianceBernstein and the other primary managers each must invest a minimum of $20 million of its own capital in its “public-private investment fund,” or PPIF.

Each primary manager will have up to 3 months to raise at least $500 million of capital from other private investors.

The Treasury Department will match the equity capital coming from the private investors.

After the Legacy Securities fund managers raise the private capital, they can buy “Eligible Assets.”

Treasury will provide debt financing equal to up to 100% of the total equity of the PPIF, officials say.

The funds also can get debt financing from private sources, and they can get leverage through the Federal Reserve’s and Treasury’s Term Asset-Backed Securities Loan Facility for TALF-eligible assets.

JACKSON SECURITIES’ ROLE

Jackson Securities will value the troubled assets and MBS entrusted to it by its partner, manage the assets, and sell the assets either as single assets or as components of MBS, according to Jackson Securities President Reuben McDaniel.

Jackson Securities was selected to participate in the PPIP because of its experience with packaging mortgages into securities and selling them as MBS, McDaniel says.

“This is new for everyone,” McDaniel says. “It is a unique approach to dealing with troubled assets in existing MBS.”

AllianceBernstein representatives were not immediately available to comment on their company’s PPIP operations.