Bayview Asset Management has launched a $500 million IPO for a debt REIT to target distressed US real estate loans and securities, according to regulatory filings.
Bayview, minority owned by The Blackstone Group, is the latest in a line of fund managers to float debt platforms to take advantage of easier capital raising conditions in the US public markets. Starwood Capital, Colony Capital, Apollo Global Management and Ladder Capital have also registered IPOs seeking to raise a total of $2 billion.
Bayview said the vehicle – Bayview Mortgage Capital – would target performing, sub- and non-performing residential and commercial mortgage loans as well as mortgage-backed securities, derivatives and foreclosed properties. It will also target equity, debt or options in real estate companies or partnerships, including joint ventures.
“The current market creates unique opportunities. We expect the supply of non-performing and sub-performing residential and commercial mortgage loans will continue to grow,” the firm said in the filings.
Bayview, led by chief executive officer David Ertel, launched its $2 billion debt fund, Bayview Opportunity Master Fund (BOF-1), in December 2007 targeting whole mortgage loans and mortgage backed securities or the “scratch and dent” market, the firm said.
As of the end of May, BOF-1 was 79 percent invested with a residential and commercial mortgage loan portfolio valued at $1.8 billion, and a securities portfolio with a current bond balance of $481 million. It has also invested in interest-only securities with a notional value of $1.2 billion. Blackstone funds are the majority investors.
In July 2008, Blackstone bought a 46 percent stake in Bayview Asset Management saying at the time there were “tremendous opportunities [in the secondary mortgage market] as financial institutions of all kinds seek to raise capital and deleverage their balance sheets”.
Bayview is part of the Bayview Financial group, founded in 1995, and operates the special servicer Bayview Loan Servicer.