Genesis Capital is to expand its business operation following a direct investment provided by investment funds managed by Oaktree Capital Management, through certain subsidiaries.
Genesis Capital, through fund vehicles that it manages, provides short-term loans to qualified real estate investors active in the distressed, single-family home marketplace.
An affiliate of the Oaktree funds has also committed up to USD100m to a new vehicle formed by Genesis Capital to invest in loans made to these investors. The Oaktree investment in this new vehicle can be increased to up to USD250m following Genesis Capital's registration as an investment adviser with the Securities and Exchange Commission.
Genesis Capital is led by Trixy Weiss, president and chief executive officer; Robert Wasmund, senior managing director; and Andrew Smith, senior managing director.
"Forging a relationship with Oaktree is an integral step in the growth of Genesis Capital," says Weiss. "The corporate investment in Genesis Capital will be utilised to expand our operations, talent and geographic footprint. The fund investment will help us meet heightened demand for residential real estate financing."
Funds managed by Genesis Capital have been providing commercial loans to residential real estate investors since 2007. Genesis Capital focuses on borrowers that have deep expertise in the purchase, renovation and sale of single-family assets, with the aim of identifying those that are well capitalised and have established records of success in the REO market.
Genesis Capital also operates in conjunction with its sister organisation, Genesis Auctions, an internet-based disposition platform providing distressed single-family home product for sale and investment.
"Led by an experienced management team, Genesis Capital is well prepared to capitalize on strong market demand for investor financing of distressed residential home properties," says Brian Laibow, managing director, Oaktree Capital Management. "With shadow inventory still significant, and sister firm Genesis Auctions' ability to access it directly from banks, servicers and private sellers, Oaktree recognized the firm's competitive advantages in this lending market, as well as the benefits of making investments in the firm and this new fund."
Genesis Capital will continue to operate its fully-integrated, specialty lending platform, with plans to grow its geographic footprint to accommodate the financing needs of investors in additional markets. Currently operating solely within the state of California, the firm plans to announce an expansion of its funds' financing offerings into additional US states experiencing similar investor demand and home inventory.