Nonbank mortgage lender and servicer Mr. Cooper has signed a definitive agreement to acquire the investment management firm Roosevelt Management Company, LLC., the company confirmed on Friday. The deal also includes the operations for affiliated company Rushmore Loan Management Services, LLC.
“This acquisition will provide us with an asset management platform to raise third-party capital on an ongoing basis from institutional investors who seek exposure to MSRs and other mortgage assets,” Chris Marshall, vice chairman and president of Mr. Cooper, told analysts during a call on Friday.
Mr. Cooper expects the deal to close mid-year following regulatory approval, but the plan is to go to market in the second half of 2023. Financial terms were not disclosed due to a non-disclosure agreement with the seller. According to Marshall, the deal’s “cash outlay is not material.”
Negotiations between the companies — and rumors about the transaction — gained traction in the second half of 2022, a source with knowledge of the deal told HousingWire under the condition of anonymity due to a confidentiality agreement.
According to the source, Mr. Cooper first showed interest in acquiring the Rushmore assets that were not included in the company’s deal with Select Portfolio Servicing Inc. (SPS). SPS, owned by Credit Suisse, acquired certain assets and servicing personnel from Rushmore in September.
The negotiations evolved and Mr. Cooper then decided to acquire Roosevelt. The private New York-based company, founded in 2008, manages third-party capital on behalf of insurance companies, pension funds, hedge funds and other investors.
Its investments started with the most credit-sensitive residential market segments and have evolved to all U.S. residential markets over the last decade.
“This company is absolutely a new avenue for Mr. Cooper,” the source told HousingWire.
Roosevelt has worked with Canadian Pension Plan Investment Board (CPP), owned by the Canadian government, as well as global investment firm Sixth Street Partners.
According to Marshall, when the deal is closed, Mr. Cooper’s asset management platform “will generate sub-servicing plus investment management revenues from investors who seek exposure to MSR economics but don’t have the infrastructure or licenses necessary for direct ownership.”