Apollo-Linked Insurer Said to Invest in Lender AmeriHome
June 12, 2014 by Jody Shenn
An insurer tied to Apollo Global Management LLC (APO) bought a stake in AmeriHome Mortgage Company LLC, a lender taken over this year by a group including former Countrywide Financial Corp. executives, according to three people with knowledge of the investment.
The deal makes Athene Holding Ltd. among the biggest investors in the Woodland Hills, California-based lender, said the people, who asked not to be identified because the information is private. The insurer, which is majority-owned by a fund managed by Apollo, also plans to buy at least some of AmeriHome’s loans that aren’t eligible for government-backed programs, known as non-agency debt, they said.
Athene is moving into the market as investors seek a remedy for bond yields that have been evaporating amid central bank stimulus measures. Athene, which also employs former executives from Countrywide, the largest U.S. home lender before the credit crisis, joins fellow insurer American International Group Inc. and bond shops including Western Asset Management Co. and Angel Oak Capital Advisors LLC in seeking to buy new mortgages or invest in originators.
Western Asset is seeing “a lot of demand” for new-mortgage investments, especially from “entities like sovereign wealth funds and central banks around the world,” Gavin L. James, chief executive officer of the asset manager’s publicly traded real-estate investment trust, said on a conference call last month.
Bond Cutback
Athene said in a March presentation it would reduce the portion of its money invested in corporate bonds in favor of structured assets such as mortgage securities. The insurer last quarter bought bonds backed by assets including home loans that were made before the housing crash and newer high-yield corporate loans, according to regulatory data compiled by Bloomberg.
AmeriHome’s offerings include “jumbo” mortgages with interest-only periods and financing that allows loan-to-value ratios of as much as 83 percent and credit scores as low as 600 on loans as big as $1 million, the people said. The firm, which now has about 50 employees, plans to eventually offer more types of loans that don’t conform to government guidelines, one of the people said.
Karen Lynn, a spokeswoman for Bermuda-based Athene, declined to comment. AmeriHome CEO James Furash said by telephone that he couldn’t comment on his firm’s investors or strategy. Furash ran the banking unit he co-founded at Countrywide before leaving the company in early 2007, the year before the lender was bought by Bank of America Corp.
Acquiring Insurers
Athene CEO Jim Belardi built his firm by acquiring insurers, most recently completing the purchase of Aviva Plc’s U.S. life and annuity business in October. The firm said in March it raised $1.1 billion in equity commitments. AP Alternative Assets LP (AAA), a publicly traded limited partnership managed by Leon Black’s private-equity firm, was set to reduce its stake in Athene to 51.5 percent after the fundraising, Apollo said in an earnings statement last month.
AmeriHome, a lender founded in 1988, was bought from Impac Mortgage Holdings Inc. for $10.2 million in March by Aris Mortgage Holding Company LLC, according to regulatory filings by the seller. Aris now does business as AmeriHome.
PennyMac Expansion
Josh Adler, who became AmeriHome’s managing director of secondary marketing, held similar roles at Countrywide and Bank of America, while John Hedlund, who previously worked at Bank of America and New Century Mortgage Corp., heads a correspondent-lending division opened in April, the people said.
In 2008, Furash had joined past colleagues including former Countrywide President Stan Kurland to start Private National Mortgage Acceptance Company LLC.
That company, known as PennyMac, has since expanded past buying distressed loans to become the ninth-largest home lender, originating $5 billion last quarter, according to newsletterInside Mortgage Finance. AmeriHome is seeking to use a similar focus on buying mortgages from other lenders, known as correspondent business, to increase volumes and add loan-servicing contracts, the people said.
Athene’s asset-management unit employs Nancy De Liban as an executive vice president of structured products, according to its website. De Liban was president of Countrywide’s alternative investment arm and helped build its trading and securitization units. Athene USA’s chief restructuring officer is Mark Suter, a co-founder of Countrywide’s bank who worked there from 2000 to 2007 as its assets increased from $100 million to $95 billion, according to the company’s website.
To contact the reporter on this story: Jody Shenn in New York at jshenn@bloomberg.net
To contact the editors responsible for this story: Shannon D. Harrington at sharrington6@bloomberg.netJohn Parry, Mitchell Martin
