Acquisitions

Five Oaks Investment Corporation has acquired 100% of the equity interests of Hunt CMT Equity from hunt Mortgage Group for US$68m. Assets of Hunt CMT Equity include the junior retained notes and preferred shares of a commercial real estate CLO, a licensed commercial mortgage lender and eight loan participations. The assets of the CLO consist of performing transitional floating rate commercial mortgage loans with a portfolio balance of US$346.3m, collateralized by a diverse mix of property types, including multifamily, retail, office, mixed-use, industrial and student housing.

Bank of Montreal is to acquire KGS-Alpha Capital Markets, a New York-based fixed-income broker specialising in US mortgage and asset-backed securities. The transaction is subject to receipt of the required regulatory approvals and is expected to close in BMO’s fourth fiscal quarter. On closing, KGS-Alpha will be rebranded as BMO Capital Markets. The KGS management team, sales and trading professionals will become part of BMO Capital Markets' trading products group led by Kelsey Gunderson. Corporate support area professionals will report to their respective areas within BMO. The acquisition complements BMO Capital Markets' existing MBS trading business and immediately makes BMO a top tier dealer in securitised products with special emphasis on agency-backed residential and commercial MBS products.

Europe

Intertrust, Jersey, has made three senior promotions across capital markets, real estate and private wealth. In capital markets, Cheryl Heslop has been promoted to associate director and has 17 years’ experience in capital markets and structured finance. Heslop currently sits on a number of boards, mostly for SPVs across multiple jurisdictions, as well as managing a team of administrators. Will Turner has been promoted to client director in the real estate team, while Lucy Blampied has been promoted to client director in private wealth.

Fund close

Alcentra has completed the final close for Clareant Structured Credit Opportunities Fund III at US$513m, as compared to a fundraising target of US$300m.   This fundraising brings assets under management for Alcentra’s structured credit platform to over US$4.5bn across a combination of open and closed end funds and separately managed accounts, and firm AUM to US$37.4bn. The fund’s objective is to generate attractive absolute and risk-adjusted returns through opportunistic investing in structured credit debt and equity securities in the US and Europe. The Fund’s investors include leading sovereign wealth, public, and corporate pension funds from Asia, Europe, the US and the Middle East.

Fund employs SF strategy

Ranger Direct Lending (RDL) has appointed Ares as its new manager after the departure of Oaktree. Under Ares’ proposal, RDL’s investments will now consist primarily of private, asset-backed loans sourced and structured by Ares. The portfolio would continue to have a significant majority of its assets in US$ denominated and US based loans, but there would also be some exposure to Canadian and Eurozone loans. Keith Ashton and Jeffrey Kramer, each a partner and co-Head of structured credit, would serve as the designated portfolio managers for RDL.

Litigation

Four former Wilmington Trust executives have been found guilty by a federal jury in Wilmington, Delaware of concealing from regulators the amount of troubled loans on the bank’s books after the financial crisis. The four executives are the former executives are president Robert Harra, cfo David Gibson, controller Kevyn Rakowski and cco William North and were found guilty by a jury on all counts faced including securities fraud, conspiracy and making false statements to federal regulators. A date has not yet been set for sentencing.

Former Jeffries’ trader Jesse Litvak’s conviction for RMBS fraud (SCI 28 April) has been overturned by the US Second Circuit Court of Appeals in Manhattan. The court stated that the district court that previously found Litvak guilty for allowing the use of certain evidence that should have been inadmissible. More specifically the “the district court materially erred in admitting evidence that 5 the counterparty representative in the sole transaction underlying the count of 6 conviction mistakenly believed that appellant was his agent.”

North America

Dechert has hired Matthew Hays to its global finance practice as partner, based in Chicago. Hays was previously a partner at Kirkland & Ellis and he has experience across a range of structured finance activities.

Portfolio acquisition

Highbrook has completed an acquisition of the Mesdag Delta portfolio. HighBrook secured the transaction on an off-market basis through partnering with the existing owner Breevast to structure a portfolio recapitalisation.  The deal was structured and closed within approximately 30 days. As a result of the transaction, Breevast has now repaid the existing €615m loan in full. The planned foreclosure sale on 15 May 2018 will not take place and Breevast has withdrawn its appeal that was placed on the agenda for 26 April 2018. The portfolio consists of 56 assets spread throughout the Netherlands totalling 456,000 square meters.  Included are a number of monumental trophy buildings in the city centre of Amsterdam as well as light-industrial properties and large grocery anchored retail centres. Over 50% of the portfolio is located in Amsterdam and nearly 70% is located within the greater Randstad area. Breevast retains full responsibility for the property, asset & development management of the portfolio. HighBrook Investors and Breevast have drawn up a proactive value-add asset management strategy and business plan for the portfolio. This transaction marks HighBrook’s 12th investment on the Dutch market within the last 18 months.  The firm has now acquired nearly 100 properties throughout the Netherlands and is actively working on multiple pending transactions, including but not limited to the acquisition of the iconic Groothandelsgebouwen in Rotterdam. Loyens & Loeff and Bryan Cave Leighton Paisner acted as advisors for HighBrook Investors in this transaction. Breevast was advised by Dentons Boekel and CMS. BNP Paribas Real Estate was deal advisor to both HighBrook Investors and Breevast.