Stone Point buys 50% stake in real estate liquidator

The US private equity firm invested an undisclosed amount from its $2.25bn Trident IV fund in Real Estate Disposition Corporation, which auctions foreclosed properties. The company has auctioned off more than 16,000 US homes since November.

Stone Point Capital has purchased a 50 percent stake in the Real Estate Disposition Corporation (REDC). The value of the deal has not been disclosed.

The auctions company specialises in properties reclaimed by mortgage companies after borrowers have defaulted on payments, as well as new-build properties that developers have failed to sell. Sales at the firm have reached $3 billion in the past year having auctioned 16,000 homes since November 2007 at 175 “large event-style auctions” across the US and online.

“In this period of turmoil in the mortgage sector, REDC is well positioned to help its clients manage the disposition of their real estate assets in an efficient auction format,” Stephen Friedman, chairman of Stonepoint, said in a statement.

US foreclosures: a
profitable business

Stonepoint made the investment through its Trident IV fund, which closed on $2.25 billion in September 2007.

Friedman is currently chairman of the board of directors at the Federal Reserve Bank of New York, and a former economic policy assistant to outgoing President, George W Bush.

Stonepoint is a Connecticut-based firm that spun out of Marsh & McLennan's MMC Capital in June 2005 and manages more than $10 billion. It targets mortgage institutions, insurance distribution, speciality lending and asset management businesses. Earlier this year, it led a group of investors in buying a minority stake for $225 million in Amherst Holdings, a company that specialises in underwriting and trading residential mortgage securities.

Other Stonepoint portfolio investments include Cyprexx Services, an outsourcing company providing repair and rehabilitation of lender foreclosed properties and ZC Sterling, which manages lender placed hazard insurance programs.