MAXEX, South Street Securities Holdings Inc. and Atlas Merchant Capital LLC have created a strategic partnership to expand liquidity in the U.S. mortgage secondary market.
MAXEX closed an equity investment, led jointly by South Street and Atlas, that also included participation from several of the company’s existing investors including J.P. Morgan and Moore Asset Backed Fund LP. Additionally, South Street will provide capital support behind MAXEX’s existing clearinghouse facility, bolstering MAXEX’s counterparty strength by leveraging South Street’s investment-grade rating and approximately $30 billion balance sheet. Terms of the transaction were not disclosed.
Atlas and South Street’s strategic investments position MAXEX for significant growth and further solidify the company’s position as an independent mortgage market utility. MAXEX, South Street and Atlas will also collaborate to accelerate industry adoption of MAXEX’s platform while expanding access to MAXEX and South Street’s products and services across the more than 500 market participants currently served by both organizations.
“South Street and MAXEX have established themselves as pioneers of modern infrastructure that is critical to mortgage trading and liquidity,” says David Schamis, founding partner and CIO of Atlas.
MAXEX is the mortgage industry’s first digital exchange for buying and selling residential mortgage loans through a single, centralized clearinghouse. The company serves mortgage originators, institutional investors and Wall Street dealers.
South Street is a financial institution offering various financial and technology services through its subsidiaries South Street Securities LLC, Matrix Applications, South Street Capital Management LLC and AmeriVet Securities Inc.
Atlas is an investment firm headed by Bob Diamond, former CEO of Barclays, with expertise in solving challenges in the global financial services industry. Atlas has a minority investment in South Street.
Says Tom Pearce, CEO, chairman, and co-founder of MAXEX: “As our exchange has grown, our value proposition and the significant operational efficiencies we provide have become increasingly clear to the industry. This partnership enables us to further accelerate our growth, expand our product suite and broaden our network.”
Houlihan Lokey served as exclusive financial advisor to MAXEX in connection with the transactions. Katten Muchin Rosenman served as legal advisors to South Street and Atlas Merchant Capital in connection with these transactions.
