Two More Mortgage Vulture Funds Go Public

Two additional mortgage vulture funds went public this week — both as REITs — but their IPOs failed to catch fire with investors. Colony Financial Inc., Los Angeles, sold 12.5 million shares, raising $250 million. Apollo Commercial Real Estate Finance, New York, sold 10 million shares and raised $200 million. Both are trading in a tight range with somewhat light volume. The two were formed to buy distressed mortgage assets, in this care, commercial-related notes. The deals were originally scheduled to price on Tuesday, but were postponed until later in the week. This past summer PennyMac Mortgage Investment Trust of Pasadena, Calif., went public, raising about $320 million, about half of what it was hoping for. PennyMac invests in, and services troubled residential loans. Sources tell National Mortgage News PennyMac has looked at several portfolios but has only wound up buying a few.