Banks Seek The Largest Land Grab The World Has Ever Seen
By Jennifer Ablan and Matthew Goldstein
Wed Aug 1, 2012 7:00pm IST
Aug 1 (Reuters) – Oliver Chang, the former head of U.S. housing strategy at Morgan Stanley, on Wednesday announced the opening of an investment firm that intends to spend up to $1 billion to acquire distressed, single-family homes over the next two years.
Sylvan Road Capital is launching with a $300 million investment from an undisclosed private equity firm, the new firm said.
The new asset management firm will seek to acquire foreclosed homes across the United States with an eye toward operating them as rental properties.
Chang’s move comes at a time when many hedge funds and private equity firms are raising money to acquire foreclosed homes with the intention of renting them out for several years before selling them as the housing recovery takes hold.
Hedge funds and other institutional investors have embraced the buy-to-rent model as an asset class for their solid income streams at a time when bond yields have plunged.
But some wonder whether institutional investors are overstating the potential for making money with foreclosed homes, given that historically it has been an industy populated by local entrepreneurs.
“America is moving toward a rentership society, and I believe the opportunity to purchase and professionally manage single-family, rental homes represents one of the most compelling investment opportunities across all asset classes,” Chang said.
In May, Reuters reported that Chang was leaving Morgan Stanley to launch a so-called buy-to-rent fund. And other Wall Street executives who had been involved with the housing market are doing something similar.
Former Goldman Sachs Group Inc. mortgage executive Donald Mullen is trying to raise $500 million for a foreclosed home fund. Goldman Sachs is helping its former executive market the fund to investors. Continue Reading Morgan Stanley – Goldman Sachs Announce to the world their intent
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