Meridian Capital Group, the nation's leading commercial mortgage brokerage, and Barings, one of the world's leading investment managers, today announced a partnership to create a new best-in-class agency lending platform. David Brickman, who until recently served as CEO of the Federal Home Loan Mortgage Corporation, will lead the platform as its Chief Executive Officer. Under the terms of the agreement, the joint venture will acquire the assets and liabilities of Barings Multifamily Capital, LLC, including its licenses to participate in various lending programs, and operate the agency loan origination and servicing businesses currently conducted by BMC under new ownership, leadership, and branding. The transaction is subject to federal government-sponsored enterprise (GSE) approvals and, pending those approvals, is expected to close immediately thereafter.
The newly created platform will be operated as a standalone business under its own name and branding which will be announced prior to the transaction closing. Meridian will own a majority of the newly created platform and its ownership is subject to increase over time. Day-to-day management of the platform will be assumed by the joint venture's dedicated management team, led by Mr. Brickman, and the joint venture will be governed by a board of directors that is majority controlled by Meridian.
In addition to heading the new agency joint venture, Mr. Brickman will assume the role of Executive Chairman of Meridian and Senior Advisor to Stone Point Capital LLC. As Executive Chairman of Meridian, he will work alongside Ralph Herzka, Meridian's Chairman and Chief Executive Officer, and Yoni Goodman, Meridian's President, to chart the strategic course of the firm, expand its product offerings, and continue to grow Meridian on a national scale. Mr. Brickman spent most of his career at Freddie Mac working in and leading the Multifamily business, where he presided over a remarkable period of growth – raising annual production from $16 billion in 2010 to almost $80 billion in 2018. He also established the company's flagship K-Deal securitization program as one of the leading securitized products in the structured finance markets.
Meridian also announced today a strategic partnership with investment funds managed by Stone Point Capital to fuel the company's continued growth as it enters a new phase of product and geographic expansion.
The agency lending partnership with Barings, the addition of Mr. Brickman, and the strategic partnership with Stone Point Capital come at a pivotal time in Meridian's 30-year history. Over the coming years, Meridian will be focused on developing its new agency lending joint venture, growing its core mortgage brokerage business significantly on a national scale, expanding its investment sales and retail leasing products to key markets nationally, and growing other lines of business.
"We are thrilled to be embarking on this new chapter," said Ralph Herzka, Chairman and CEO of Meridian Capital Group. "Our partnership with Barings will enable us to join forces with one of the world's leading asset managers and reintroduce Meridian to the direct agency lending arena. The addition of David Brickman to our executive team will mean that we are working alongside one of the most prominent multifamily experts in the country. David did not just preside over a remarkable period of expansion at Freddie Mac; he did so through the type of innovation, creativity and ingenuity that are critical to thriving in today's marketplace."
Yoni Goodman, Meridian's President who worked side-by-side with Mr. Herzka to effectuate the developments announced today added, "Working towards our goals with Stone Point Capital as a partner means that we will have the resources, touchpoints, and perspective to realize the grand vision we have for Meridian. Ralph and I welcome Mr. Brickman, Barings, and Stone Point Capital to the Meridian family."
Commenting on the agency lending partnership, Eric Lloyd, Head of Global Private Assets at Barings said, "Barings continues to build out its real estate debt capabilities, and our joint venture with Meridian extends our reach to a much broader market. This includes markets that complement our existing institutional commercial mortgage lending business."
Chuck Davis, CEO of Stone Point Capital, added, "We are excited to be partnering with Meridian as it enters into a new phase of growth and development. We believe Meridian is uniquely positioned to grow its core business and expand into new business lines, and we look forward to partnering with the team to help them achieve these goals and more."
Subject to regulatory approval, the agency lending joint venture will, through a wholly owned subsidiary, participate in the Federal National Mortgage Association ("Fannie Mae") DUS® program, the Federal Home Loan Mortgage Corporation ("Freddie Mac") Optigo network, and Federal Housing Administration/Government National Mortgage Association ("FHA/GNMA-Ginnie Mae") multifamily lending programs. In addition, the new business will service commercial and multifamily loans for Barings' parent company MassMutual and other lenders. Meridian will originate multifamily loans on behalf of the venture on a non-exclusive basis, and will continue to originate for various banks, agency lenders, and financing sources as it has in the past.
BofA Securities is serving as exclusive financial advisor to Barings in connection with the agency lending partnership with Meridian.
About Meridian Capital Group:
Founded in 1991, Meridian Capital Group is America's most active dealmaker and one of the nation's leading commercial real estate finance, investment sales and retail leasing advisors. In 2020, Meridian closed close to $40 billion in financing across more than 250 unique lenders. Meridian represents many of the world's leading real estate investors and developers and the company's expansive platform has specialized practices for a broad array of property types including office, retail, multifamily, hotel, mixed-use, industrial, and healthcare and senior housing properties. Meridian is headquartered in New York City with offices in New Jersey, Maryland, Illinois, Ohio, Florida, and California. Learn more at www.meridiancapital.com
About Barings
Barings is a $354+ billion* global investment manager sourcing differentiated opportunities and building long-term portfolios across public and private fixed income, real estate, and specialist equity markets. With investment professionals based in North America, Europe and Asia Pacific, the firm, a subsidiary of MassMutual, aims to serve its clients, communities and employees, and is committed to sustainable practices and responsible investment. Learn more at www.barings.com.
*Assets under management as of September 30, 2020
About Stone Point Capital
Stone Point Capital LLC is a financial services-focused private equity firm based in Greenwich, CT. The firm has raised and managed eight private equity funds – the Trident Funds – with aggregate committed capital of approximately $26 billion. Stone Point Capital targets investments in companies in the global financial services industry and related sectors. Learn more at www.stonepoint.com.
