Alternative Asset Management

Alternative Asset Management

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AUSTIN, Texas, Nov. 16, 2021 /PRNewswire/ -- The Palisades Group, LLC ("Palisades"), an alternative asset manager in the global residential credit markets, today announced the closing of its residential construction and property rehabilitation loan securitization.  This transaction represents a significant development in the capital markets as a majority of the collateral is comprised of residential construction loans with no cap on that cohort during the 2-year reinvestment period.

The emergence of construction loans as securitization collateral comes at a critical time in the housing market.

The emergence of construction loans as securitization collateral comes at a critical time in the housing market as high consumer demand is being met with historically low levels of inventory and rapidly increasing home values. "These dynamics are crowding out families in need of affordable housing solutions," said Jack Macdowell, Palisades' Chief Investment Officer.  "We believe providing efficient financing to professional builders and experienced developers is a key element in creating supply-demand parity and stabilizing the growth in U.S. home prices."

Palisades sources construction and property rehabilitation loans through a national network of lending partners. Consistent with the Firm's active management style, investment personnel review each asset prior to purchase and oversee all post-acquisition credit and risk management activities. 

"Our focus on heavier rehabilitation and construction loans, including 5+ unit and multifamily projects, tend to filter out less experienced 'hobbyists' that look for light rehab fix-and-flip projects," said Nirvan Ghosh, Partner and Senior Portfolio Manager. "Experienced developers and professional builders generally have better access to materials and labor, are more adept at staying on budget and managing project timelines, and exhibit overall better credit risk in our view," added Ghosh.

The transaction included two classes of securities, a $175 million Class A1 and $25 million Class A2 and featured a two-year revolving period during which time principal collections may be reinvested in additional construction and rehab loans. 

Nomura Securities International, Inc. acted as sole lead structuring agent for the transaction.

About Palisades

As an alternative asset manager in the global residential credit markets having managed in excess of $17.4 billion of loans and real estate since 2012, the Firm invests in, and actively manages, residential loans and real estate-related strategies. Palisades currently manages a diverse portfolio of residential loans and real estate with notional balance of approximately $5.0 billion with underlying properties located in the United States, Europe and Latin America. 

For more information, please visit www.palisades.us.com.

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SOURCE The Palisades Group

 
 

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