Capmark CMBS team spins-out to form Ventras Capital

Capmark Investments’ securities team has spun-out to form Ventras Capital Advisors together with private equity firm MBH Enterprises.

Scott Roth, Patti Unti and Jimmy Parsley previously served as co-heads of Capmark’s securities team and were members of Capmark Investment’s securities investment committee. Together they will lead Ventras and are joined by Beth Forbes, Kevin Kohler, Susan O’Leary and Dave Putro, all of whom were vice presidents at Capmark.

Gregory McManus, previously Capmark's chief financial officer, has also joined Ventras as principal in the firm’s Philadelphia office.

As part of the spin-out, Ventras has acquired 12 management contracts from Capmark representing more than $5 billion of assets, three-quarters of which comprise commercial real estate debt. Roth told PERE the contracts included CMBS, some REIT senior unsecured debt and RMBS.

Ventras will target commercial distressed real estate loans, including CMBS and whole loans, as well as residential debt, such as pools of whole loans and some RMBS.

You just cannot go out there and buy 2005, 2006 or 2007 debt and not worry about principal loss. There are going to be issues even at this level. Scott Roth

Roth warned however that the scale of opportunity in CMBS debt would not be as great as investors initially expected, with some investors facing potential losses on even high grade and AAA-level debt. “You just cannot go out there and buy 2005, 2006 or 2007 debt and not worry about principal loss. There are going to be issues even at this level.”

Unti said that the firm was currently looking to raise capital for investment, adding that although the scale of the opportunity was not as great as people might have first imagined, it was “still unprecedented. We have been in the securitised space for 12 years and moved up and down the capital stack. In 2000, it was B-pieces, then mezzanine and then we adopted a short strategy – now we think it’s time to go long.”

Ventras will also work with another of MBH’s portfolio companies, Denver-based residential mortgage servicer Integrated Asset Services, on residential mortgage workouts.

We have been in the securitised space for 12 years and moved up and down the capital stack. In 2000, it was B-pieces, then mezzanine and then we adopted a short strategy – now we think it’s time to go long. Patti Unti

Steve Gutterman, MBH managing director, said in a statement: “Over the next two to three years, there will be intense interest in opportunistically investing in distressed residential and commercial assets.”

Capmark Financial – the parent company of Capmark Investments, through which it manages value-added and opportunistic commingled funds and separate accounts – is preparing to file for bankruptcy protection by the end of the week, sources told Reuters.

The firm said in September it would have to consider the move after reporting $1.6 billion of losses in the second quarter, thanks to its investments in loans and property. Capmark has already agreed to sell its North American mortgage business to Warren Buffett’s Berkshire Hathaway and the holding company Leucadia National Corporation for $490 million.

The Reuters report said Capmark, which also owns a bank, is in negotiations with lenders, bondholders and the Federal Deposit Insurance Company that will result in a filing by the end of October at the latest. They are working on details of a debt-for-equity swap that will take place to bring the company back out of bankruptcy, the source is cited as saying.