Investments

Angel Oak raises nearly $300 million to invest in non-QM lending

Private capital fund ready to buy mortgages

It appears that private capital’s interest in mortgages that don’t fit into the Qualified Mortgage box is growing.

Angel Oak Capital Advisors, an investment management firm that specializes in mortgage credit, announced this week that it raised nearly $300 million to invest in non-QM lending.

Specifically, the company raised $291 million in capital commitments for its first private credit fund, the Angel Oak Real Estate Investment Fund I.

The fund invests primarily in non-QM mortgages and  “provides investors access to the growing opportunity in non-bank lending to creditworthy borrowers who have been unable to obtain residential mortgages since the credit crisis,” the company said.

The company said that its initial fundraising goal for the fund was $250 million, and now having exceeded that amount, the fund is closed to new investors.

Angel Oak is no stranger to investing in non-QM loans.

The firm manages over $3.5 billion in residential mortgage credit, and has securitized $850 million in non-QM loans since 2015. Additionally, the company’s affiliated mortgage companies originated over $1 billion in non-QM loans in 2017.

“More and more, we’ve seen institutional investors recognize the growth potential for non-bank lending,” said Sreeni Prabhu, co-CEO and chief investment officer of Angel Oak.

“Our success in raising capital for Angel Oak Real Estate Investment Fund I demonstrates strong investor interest in the Fund’s differentiated strategy to provide attractive, risk-adjusted returns backed by residential real estate,” Prabhu added. “We believe this opportunity, when paired with our expertise in non-agency mortgage credit, makes this an attractive investment.”

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