Fortress Announces Agreement to Sell Specialty Mortgage Lender and Servicer, Foundation Home Loans
Transaction Underscores Dramatic Turnaround of Former GMAC Platform Acquired by Fortress Following the Global Financial Crisis
LONDON–(BUSINESS WIRE)–Fortress Investment Group LLC (“Fortress”) today announced an agreement to sell Foundation Home Loans, the UK specialist mortgage lender and servicer, to Athene Holding Ltd., an industry-leading financial services company focused on retirement savings solutions.
Foundation Home Loans (the trading brand of Paratus AMC Limited) is one of the best-known names in the European mortgage lending, servicing and securitization markets. As GMAC-RFC, the company grew to be the 10th largest UK originator of residential mortgages, a leading issuer of UK RMBS and a central contributor to the formation of the specialist loan market.
Funds managed by affiliates of Fortress acquired GMAC-RFC from GMAC in October 2010, as the company, and its loan portfolio, faced substantial challenges in the aftermath of the Global Financial Crisis. Management appointed by Fortress rebranded the company and immediately set about transforming the company into a focused and highly effective mortgage servicer as many borrowers struggled to maintain homeownership following the Global Financial Crisis. With this strong focus on customer outcomes and providing solutions to borrowers in distress, the company saw dramatic improvements in loan performance and a substantial decline in arrears levels in a £4bn book of legacy mortgage loans.
Under Fortress stewardship, the company returned to profitability in 2011, and in 2015, the company relaunched mortgage lending under the Foundation Home Loans brand, which has established itself as a top-three specialist buy-to-let mortgage lender and a growing provider of specialist mortgages to residential borrowers. Since relaunching lending, Foundation Home Loans has originated over £2.5bn of mortgage loans, including over £500m in the first half of this year.
Foundation Home Loans also developed a strong presence in the capital markets under Fortress, with cumulative RMBS issuance in excess of £3bn through ten transactions since 2017, including the successful securitisation of legacy mortgage portfolios acquired from third parties. By June 2021, Foundation Home Loans held mortgage loans in excess of £3bn on its balance sheet and serviced an additional £930,000,000 for a total assets under management balance of nearly £4bn.
During nearly 11 years under FIG ownership, the company’s headcount more than doubled to nearly 300 staff. The company has maintained its headquarters in Bracknell in Berkshire, where it was founded.
Commented Hans Geberbauer, CEO of Foundation Home Loans and an employee of the company since 2002: “Since their acquisition of the company in 2010, Fortress has been an incredibly supportive owner, leading the company out of the great financial crisis and investing expertise and capital to build a leading specialist mortgage lender. Fortress continually reaffirmed its commitment to our business, to our vision and to the customers we serve, investing in our company’s growth right through the uncertainty created by the Brexit referendum and the COVID-19 pandemic. They have created a great foundation for the company to thrive under its new prospective shareholder.”
The acquisition remains subject to consent by the Financial Conduct Authority.
About Fortress
Founded in 1998, Fortress manages $53.1 billion of assets under management as of March 31, 2021, on behalf of approximately 1,800 institutional clients and private investors worldwide across a range of credit and real estate, private equity and permanent capital investment strategies.
Contacts
Gordon E. Runté
Managing Director
Fortress Investment Group LLC
(212) 798-6082
[email protected]
