Former Washington Mutual executives Sreeni Prabhu and Brad Friedlander partnered with SouthStar Funding founding partner, Michael Fierman, to start Angel Oak Capital Partners. Angel Oak is now focusing on distressed mortgage-backed securities (MBS), currently manages $30m in assets and is looking for more. So far, the fund's strategy is focused on acquiring pools of MBS that are trading at distressed prices despite prime performance. "We underwrite to buy and hold but will look to opportunistically sell when market liquidity returns," explains Prabhu. "The key difference with bigger firms who have the same strategy as us, we distribute monthly cash flows generated from these bonds back to investors on a monthly basis," he adds. Angel Oak is based in Atlanta, as was SouthStar, the wholesale and subprime mortgage lender that originated as much as $6.5bn of non agency mortgage products annually before it closed operations in 2007. Write to Jacob Gaffney.