KKR Acquires Merchants Mortgage Trust & Corporation
January 19 2022 - 4:15PM
Business Wire
Residential Bridge Mortgage Company Joins KKR’s
Portfolio of Asset-Based Finance Investments
KKR, a leading global investment firm, today announced that KKR
has acquired Merchants Mortgage Trust & Corporation, LLC
(“MMTC” or the “Company”), a real estate lending platform
specializing in short-term mortgage products for experienced
individual residential real estate investors. KKR is making its
investment in MMTC through its private credit funds and accounts as
part of the firm’s Asset-Based Finance (ABF) investment strategy,
which pursues privately originated investments backed by
diversified pools of hard and financial assets.
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MMTC’s Chief Executive Officer, Justin Land, and the existing
management team will continue to lead the Company. KKR’s investment
provides MMTC with access to long-term capital to grow its
origination activity and support the expansion of its product
offerings, geographic footprint and financing capabilities. As a
part of this transaction, MMTC will also acquire the outstanding
interests in its affiliate, Orchard Funding.
Founded in 1961 and headquartered in Denver, Colorado, MMTC
primarily originates residential bridge loans for private investors
that are predominantly used for property rehabilitation with a
focus on one-to-four unit residential properties. MMTC operates in
growing markets across the western United States with a strong
presence in Colorado, Arizona and California. The Company’s
financing solutions enable community-based entrepreneurs to improve
the quality of U.S. residential housing stock by investing in
renovations and new construction.
“The support and long-term capital provided by KKR will
accelerate our growth and broaden and enhance our ability to meet
the financing needs of our customers. We look forward to working
with KKR and realizing the benefits this strategic partnership will
bring to MMTC and to the entrepreneurs we are proud to finance,”
said Land.
MMTC has significantly expanded its lending activity in recent
years and in 2021 originated more than $500 million in loans to
approximately 500 different borrowers. Through its investment,
KKR’s credit strategies will gain exposure to a pool of directly
originated, primarily short-term residential real estate loans made
to a group of high-quality borrowers.
“By enabling entrepreneurs to invest in residential real estate,
MMTC is contributing to the long-term resilience of the U.S.
housing market, which we are excited to support through our ABF
strategy,” said Daniel Pietrzak, Partner and Co-head of Private
Credit at KKR. “We look forward to working with the Company’s
talented management team as they continue to grow MMTC’s already
strong market presence in the U.S.”
KKR has deployed more than $5 billion in 49 ABF investments
globally since 2016. KKR’s ABF portfolio includes several
independently operating proprietary loan origination platforms
focused on themes in consumer/mortgage finance, hard assets, SME
and contractual cash flows. KKR has established these lending
businesses in partnership with experienced industry management
teams to pursue specific lending markets that the firm finds
attractive.
Financial terms of the transaction were not disclosed.
Hovde Group and Wells Fargo served as financial advisors to MMTC
and Otteson Shapiro LLP and Hunton Andrews Kurth acted as legal
advisors. Sidley Austin LLP served as legal counsel to KKR.
About Merchants Mortgage Trust & Corporation
Merchants Mortgage & Trust Company, LLC is a real estate
finance company that originates and finances residential mortgages
primarily to private investors purchasing 1 to 4 family homes.
Founded in 1961 and headquartered in Denver, Colorado, Merchants
primarily operates in growing markets in the western United States.
Merchants provides a range of products to its customer base
including bridge, rental and ground-up construction loans. The
company is focused on providing a superior product to its customers
with high levels of customer service, rapid funding and competitive
pricing.
About KKR
KKR is a leading global investment firm that offers alternative
asset management and capital markets and insurance solutions. KKR
aims to generate attractive investment returns by following a
patient and disciplined investment approach, employing world-class
people, and supporting growth in its portfolio companies and
communities. KKR sponsors investment funds that invest in private
equity, credit and real assets and has strategic partners that
manage hedge funds. KKR’s insurance subsidiaries offer retirement,
life and reinsurance products under the management of The Global
Atlantic Financial Group. References to KKR’s investments may
include the activities of its sponsored funds and insurance
subsidiaries. For additional information about KKR & Co. Inc.
(NYSE: KKR), please visit KKR’s website at www.kkr.com and on
Twitter @KKR_Co.
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Media Contacts Julia Kosygina and Miles Radcliffe-Trenner
212-750-8300 media@kkr.com
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