Global investment firm Atlas Merchant Capital and Florida-based lender A&D Mortgage have announced a joint venture (JV) to expand A&D’s $7 billion mortgage securitization platform.
The JV, which will draw from a combination of internal and third-party capital sources, will purchase mortgages originated and serviced by A&D and other lenders.
The goal of the JV is to securitize the loans and invest across a range of securities in sponsored transactions, the two companies and residential mortgage investment manager Imperial Fund Asset Management said on Tuesday.
The JV closed its first residential mortgage-backed securities (RMBS) deal on Aug. 26, securing $370 million of mortgage collateral sourced from A&D. The deal was rated by S&P Global and Kroll Bond Rating Agency. It was A&D’s 21st deal but the first with Atlas as a partner.
“Atlas Merchant Capital has sought ways to capitalize on the dislocation in the mortgage market caused by the rapid rise of interest rates throughout the last few years and we are thrilled to be partnering with A&D,” Bob Diamond, co-founder and CEO of Atlas Merchant Capital, said in a statement.
“The timing of this partnership could not be better as the tone in the mortgage market has been improving, which would provide a large tailwind for this asset class.”
Under the partnership, Atlas will manage the JV’s mortgage investment strategy.
“Opportunities for private credit in the residential mortgage sector have continued to grow as commercial banks have increasingly divested these loans from their balance sheets,” said David Schamis, co-founder and chief investment officer at Atlas Merchant Capital.
Founded in 2013, Atlas Merchant Capital is an alternative asset management company with offices in New York and London. Atlas invests globally, particularly within the financial services sector, through a diverse range of funds. These include private equity, credit opportunities and special purpose acquisition company (SPAC)-focused public equity funds.
Hollywood, Florida-based A&D Mortgage is a wholesale lender that has originated more than $10 billion in mortgages since 2020. It also manages a servicing portfolio of more than $8 billion, according to A&D. The lender primarily operates in the non-QM sector but also offers conventional and government products.
The lender began servicing some investor loans in 2008. It added non-QM loans in 2015 and expanded to Fannie Mae loan servicing in 2017. It added Freddie Mac loans in 2019 and jumbo loans for JPMorgan Chase the following year.
