Brookfield Buys Alternative Mortgage Lender As Part Of Private Credit Push
Brookfield Asset Management is buying mortgage lender Angel Oak Cos., pushing the firm deeper into the private credit space where it is quickly growing.
Brookfield has reached an agreement to pay an undisclosed price for a majority stake in Angel Oak Cos., a mortgage lender founded in 2008 that focuses on nonqualified residential mortgages. Angel Oak’s $18B portfolio will be part of Brookfield’s broader $317B credit business, but the company will continue to operate independently.
The asset management firm will acquire a 50.1% stake in Angel Oak and offer its own investors access to the firm’s residential mortgage credit business, Bloomberg reported.
“We believe Brookfield can add significant value as Angel Oak looks to build upon its success by both broadening and deepening its relationships with institutional investors,” Brookfield Credit CEO Craig Noble said in a statement.
Angel Oak co-founders Sreeni Prabhu and Mike Fierman will stay on as co-CEOs of the company, which focuses on lending to borrowers who don’t typically qualify for mortgages from banks or government agencies, including self-employed borrowers and individuals with assets but no income.
The acquisition fits into Brookfield’s broader strategy to expand its credit platform, the company said. Brookfield’s credit arm is the fastest-growing segment of its business, with some $317B in managed assets.
The heads of Angel Oak said in a joint statement that the acquisition would open new avenues for the company’s growth and create “significant opportunities to scale our integrated asset management and mortgage operations to better serve our clients.”
Toronto-based Brookfield Corp. moved Brookfield Asset Management to New York in 2024 as part of a broader corporate restructuring that was aimed at growing its investor base. Roughly half of the firm’s credit business comes through partnerships with other firms, while the rest is its own deployed capital, according to Bloomberg.
Brookfield has also been raising funds for strategic real estate opportunities, adding $500M to its Brookfield Strategic Real Estate Partners V fund in the fourth quarter. The fund, which launched in 2023, has raised $8.5B in all and spent roughly $2.3B on acquisitions to date.
Large asset managers and private equity firms are turning to credit offerings to fuel growth, and some banks are using the firms as pass-throughs to gain new, limited exposure to the commercial real estate sector.
Angel Oak originated $30B in residential mortgages over the past decade, bundling much of the debt into bond offerings of varying sizes and risk profiles, the company told Bloomberg. Leadership at both firms expects the elevated interest rate environment will offer the business a strong tailwind.
“We expect rapid growth in mortgage and consumer products with this interest rate environment,” Fierman told Bloomberg.
