Fortress Investment Group has announced that affiliates of certain Fortress managed funds have agreed to purchase performing and non-performing portfolios of European residential mortgage assets from affiliates of Residential Capital (ResCap), as well as acquire the ResCap mortgage platforms located in Germany, the Netherlands and the UK.
The assets to be acquired include approximately 6,000 residential mortgage whole loans. These transactions represent approximately 10% of ResCap’s December 31, 2009 total assets and approximately 40% of total assets on a pro forma basis, adjusted for the required FAS 167 accounting treatment for certain off-balance sheet securitizations that are recorded on-balance sheet effective January 1, 2010.
The companies to be acquired include GMAC-RFC in the UK, GMAC-RFC Investments, GMAC-RFC Nederland, Atlas Funding and Quion 20 in the Netherlands and GMAC-RFC Deutschland and GMAC-RFC Servicing in Germany. Such entities were the originators of and currently act as servicers to, amongst others, the mortgage backed securities transactions entered into by the various issuance vehicles established under the EMAC DE, EMAC NL and Rathmount names.
As a portfolio investment, each acquired company will be financially and operationally separate from Fortress Investment Group, Fortress managed funds and their affiliates.
Peter Briger, co-chairman of Fortress Investment Group, said: “The acquisition of these portfolios and companies are further examples of businesses looking to divest non-core assets – one of the compelling investment opportunities we are seeing in the current markets.
“These servicing platforms, combined with other Fortress owned servicers, provide our firm with expertise throughout Europe. Our platforms will not only maximize the value of European assets currently owned in Fortress funds but provide us with an increased ability to source and identify attractive investment opportunities.”
Michael Carpenter, CEO of GMAC, said: “The agreements to sell the European mortgage assets and businesses are key steps toward our objective of reducing the ongoing exposure for GMAC from the legacy mortgage operation. This is a significant achievement and will contribute in putting GMAC on a path toward improved performance.”
Thomas Marano, CEO of ResCap, said: “We are pleased to have reached agreements to sell these assets and operations and believe this is a favorable outcome for all parties involved. These transactions validate the approach we are taking to pursue alternatives for our legacy mortgage businesses that strive to reduce exposure and preserve value.”
However, the closing of the transactions is subject to regulatory approvals and closing conditions.
ResCap is a mortgage subsidiary of GMAC Financial Services.