As insurance companies seek diversification and capital-efficient yield, Angel Oak engages in capital-raising initiative focused on delivering residential mortgage loan exposure to its client base

Angel Oak Capital Advisors LLC, an investment management firm that specializes in value-driven structured credit investing, announces the launch of its specialized insurance solutions initiative designed to give insurance companies access to newly originated and secondary residential mortgage whole loans, primarily via customized separately managed accounts (SMAs). This opportunity comes at a time when insurance companies are seeking diverse, higher-yielding solutions, branching out from traditional corporate bond and commercial real estate exposure. Against the backdrop of the broader fixed-income macro environment, insurers see value in accessing the residential home loan market, which they have underinvested for more than a decade.

The firm has already seen traction with this initiative, most recently securing a $200 million capital commitment from a large insurance institution. Including this initiative, Angel Oak’s private debt strategies have the capacity of deploying approximately $5 billion in mortgage loan purchases across nonqualified, second-lien, home equity line of credit (HELOC), and agency mortgages. In addition, the firm will continue to look for opportunities to invest in sectors that banks have exited due to regulatory requirements. Angel Oak also anticipates coming to market later this year with a securitization composed primarily of HELOC loans.

“Since inception, Angel Oak has served many insurance companies, identifying and addressing the specific challenges they encounter,” said Sreeni Prabhu, co-CEO and managing partner of Angel Oak. “Our bespoke whole loan SMAs, in tandem with our securitization-focused private strategies, have significantly fortified our relationships with institutional clients. We see immense opportunity to deliver attractive risk-adjusted returns for a larger insurance client base with this dedicated effort.”

Angel Oak can source loans through various channels, including through its affiliate lender Angel Oak Mortgage Solutions, which the firm believes is a key differentiator from other investment managers offering residential credit solutions. In recent months, the firm has expanded into commercial lending with the hiring of institutional commercial real estate veteran Sumit Sasidharan and offers insurance companies access to commercial mortgages as part of its product suite.

Spearheading this initiative are Manish Valecha, head of client solutions at Angel Oak, and Bernard Dzata, managing director, institutional business development. Both Manish and Bernard will work closely with insurers to build bespoke investment solutions tailored to each insurer’s specific goals and risk tolerance.

“We are just scratching the surface in terms of providing capital-efficient solutions for insurance companies on the whole loan front,” stated Manish. “Our institutional team has dedicated substantial resources to underscoring the advantages of our vertically integrated model, fostering partnerships with insurance companies. Furthermore, we believe our long track record in mortgage origination, going back more than 10 years, is a key differentiating factor in an uncertain economic environment.”

About Angel Oak Capital Advisors, LLC

Angel Oak is an investment management firm focused on providing compelling fixed-income investment solutions to its clients. Backed by a value-driven approach, Angel Oak seeks to deliver attractive, risk-adjusted returns through a combination of stable current income and price appreciation. Its experienced investment team seeks the best opportunities in fixed income, with a specialization in mortgage-backed securities and other areas of structured credit.

This document does not constitute advice or a recommendation or offer to sell or a solicitation to deal in any security or financial product. It is provided for information purposes only and on the understanding that the recipient has sufficient knowledge and experience to be able to understand and make their own evaluation of the proposals and services described herein, any risks associated therewith, and any related legal, tax, accounting, or other material considerations. To the extent that the reader has any questions regarding the applicability of any specific issue discussed above to their specific portfolio or situation, prospective investors are encouraged to contact Angel Oak or consult with the professional advisor of their choosing.

There is no guarantee that the investment objectives will be achieved. Moreover, past performance is not a guarantee or indicator of future results.

The specific investments described herein do not represent all investment decisions made by Angle Oak. The reader should not assume that investment decisions identified and discussed were or will be profitable. Specific investment advice references provided herein are for illustrative purposes only and are not necessarily representative of investments that will be made in the future.

Certain information contained herein constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue,” or “believe,” or the negatives thereof, or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events, results, or actual performance may differ materially from those reflected or contemplated in such forward-looking statements. Nothing contained herein may be relied upon as a guarantee, promise, assurance, or representation as to the future.

Investment involves risk, including the possible loss of capital.

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