Since 2008, our Residential Opportunities team has continued to build upon its extensive knowledge and experience in residential debt.
Our Residential Opportunities strategies seek to drive value through a combination of capital appreciation and current income, investing primarily in mortgages, loans, and real assets, and leveraging our proprietary asset management platforms to enhance performance.
Mortgage Credit
Cerberus is a tenured investor in the global residential asset class with an experienced, dedicated team focused on investing in the United States and Western Europe mortgage sectors. Throughout our history, we have worked to identify compelling risk-adjusted investments across various market cycles.1
In 2013, Cerberus and certain affiliated funds and accounts established FirstKey Mortgage, a proprietary operating company that seeks to provide a competitive advantage in loan acquisition and securitization.2 FirstKey Mortgage has approximately 50 employees that helps to enhance our capabilities in collateral underwriting and selection, pre-securitization due diligence, rating agency collaboration, and securitization and distribution operations.3
Single-Family Rental Homes
The U.S. single-family home market is vast with a market value of approximately $36 trillion. Within that market, single-family rentals (“SFR”) represent an estimated ~15 million units with a market value of more than $5 trillion, which is almost entirely owned by non-institutional investors.4
In 2014, Cerberus further expanded our capabilities in residential opportunities with a focus on providing institutional investors with direct access to investing in diversified SFR portfolios. Cerberus manages SFR properties using a team of investment professionals and the resources and services of our affiliated property manager, FirstKey Homes. As a proprietary operating company, FirstKey Homes provides dedicated acquisition and property management services across approximately 30 U.S. markets.5
The Cerberus Team
The Cerberus Residential Opportunities team consists of approximately 30 dedicated professionals.6 The senior investment team has considerable experience investing in residential mortgage securities and assets, and a wide array of product knowledge, including liquid interest rate products, single-family rental homes, performing and non-performing whole loans, servicing, mortgage servicing rights, securitization, contract finance, and indices.
Our team members bring valuable knowledge from the sell-side, having worked in trading, structuring, securitization, modeling, banking, and sales for large mortgage-backed securities issuers. Every investment opportunity is rigorously vetted through detailed examinations of loan and industry data, dual-track credit and prepayment modeling, and identification of pricing inefficiencies.
1 There can be no guarantee historical trends will continue.
2 There can be no guarantee such advantages will be realized to the benefit of any Cerberus-managed fund. The fees and expenses associated with FirstKey Mortgage (“FKM”) and other affiliated service providers are borne by the Cerberus-managed funds, and generally not offset against applicable management fees, in accordance with the applicable Cerberus-managed funds’ organizational documents.
3 Note: FirstKey Mortgage employee data as of May 1, 2024, and subject to change without notice. There can be no assurance that any of these professionals will remain with the company.
4 Source: GreenStreet, Single-Family Sector Outlook as of January 30, 2024. Market sizing based on GreenStreet total units data and Cerberus estimate of $390k average home price.
5 Note: FirstKey Homes data as of March 31, 2024. The fees and expenses associated with FirstKey Homes (“FKH”) and other affiliated service providers are borne by the Cerberus-managed funds, and generally not offset against applicable management fees, in accordance with the applicable Cerberus-managed funds’ organizational documents.
6 Employee data as of May 1, 2024, and subject to change without notice. The Cerberus Residential Opportunities team includes both investment and non-investment professionals. There can be no assurance that any of these professionals will remain with the Firm.
