Pretium acquires fix-and-flip lender Anchor Loans

Investment management company Pretium's acquisition of fix-and-flip lender Anchor Loans kicks off an expansion of the company’s mortgage-related assets.

Pretium purchased all of the outstanding stock in Anchor from affiliates of Wafra Capital Partners and the other unnamed owners. Terms of the transaction were not disclosed.

"As we continue to experience a dynamic housing market defined by a growing shortage of total housing supply and an insufficient stock of move-in ready homes, we are seeing a significant increase in the investments required to upgrade today's aging homes and modernize our infrastructure," Don Mullen, Pretium CEO said in a press release. "Pretium was formed with the goal to solve the shortage of housing in the U.S. and, today, is contributing to our local communities by creating attractive rental homes, offering capital solutions to homebuyers, and now providing loans for residential real-estate investors and entrepreneurs."

Anchor's value proposition to Pretium is the opportunity to cross-sell to each other's clients, added Andrew Pollock, CEO of the fix-and-flip company, in an interview. Pollock and his management team will continue to head up Anchor from its Thousand Oaks, California headquarters.

"We've had conversations with a myriad of suitors and given their synergies, given their direction, given their focus within the business purpose residential arena, we're a very nice fit within their organization and their portfolio companies," he noted.

Because of the inventory shortage, the demand for properties that can be rehabilitated — and the need to finance both the acquisition and the work — will continue to increase, Pollock said.

The capital Pretium brings to Anchor will accomplish three goals. The first is to expand Anchor’s national footprint; the company already lends across the U.S. but its business is concentrated west of the Mississippi. It seeks to grow its existing business on the East Coast. Secondly, Anchor plans to add other lending classes besidesfix-and-flip and ground-up infill construction finance. Those new lines include both single- and multifamily rental, single-family fix and hold "and we also like the multifamily fix and hold product. By all means we see that as pure opportunity," Pollock declared. The third growth opportunity is client expansion. The company already gets a tremendous amount of repeat business from existing customers.

However, Anchor would like to gain additional wallet share from some existing customers who currently split their business with several lenders, said Pollock. "Then there's clients that we've just never talked to before. We need to reach out and connect with and deliver to them our value proposition,” he said.

American Equity Investment Life Insurance provided financing for the acquisition as part of an expansion of its strategic partnership with Pretium. In addition, American Equity acquired approximately $1 billion of Anchor's loan originations.

Other mortgage businesses owned by Pretium include mortgage servicerSelene Finance; non-qualified-mortgage lenderDeephaven; and single-family rental ownerProgress Residential. Earlier this year, it purchased another single-family residential company,Front Yard Residential, in a joint venture with Ares Management. Pretium has also bought non-performing loan portfolios, including part of a recent package from Fannie Mae.