Capmark applies to become bank holding company

The San Mateo, California-based financial group, which manages value-added and opportunistic real estate funds, applies for bank holding status as it seeks a capital infusion from the US government.

Real estate services firm Capmark Financial has applied to become a bank holding company in a bid to attract capital from the US government’s $700 billion bailout package.

The San Mateo, California-based firm, which manages value-added and opportunistic commingled funds and separate accounts through its investment arm, Capmark Investments, said in a statement the move was intended to boost Capmark’s liquidity and expand its “deposit-taking capabilities”.

Capmark did not disclose how much capital it was seeking and was unavailable for comment by press time.

Capmark said it could not guarantee whether its application for bank holding status would be approved or whether it would receive a capital boost from the US Treasury.

In September, Goldman Sachs and Morgan Stanley both became bank holding companies, following the collapse of investment bank Lehman Brothers, in a bid to take advantage of the $700 billion Troubled Asset Relief Programme (TARP). The move puts bank holding comes under the regulation of the Federal Reserve and places certain restrictions on their activities, including regulatory capital requirements, minimum leverage ratios and limitations on the kinds of non-banking operations that they and their subsidiaries may engage in.

It is unclear how bank holding status will impact on Capmark’s real estate investment arm, Capmark Investments.

In the statement, Capmark said its Utah industrial bank, Capmark Bank, would also convert to a state bank and seek capital under TARP.

In October, Steven Lin, executive vice president of Capmark Financial and head of the firm’s Asia operations, resigned from the company. Based in Tokyo, Lin was responsible for all of Capmark’s activities in Asia and was a member of the executive and investment committees. Capmark Asia targeted Japan, Taiwan, China and the Philippines, investing in equity real estate, non-performing loans and distressed debt.