NEW YORK, Jan. 18, 2018 /PRNewswire/ -- Five Oaks
Investment Corp. (NYSE: OAKS) ("Five Oaks" or the
"Company") announced today that its independent directors
unanimously approved the entry into a new management agreement with
Hunt Investment Management, LLC, a subsidiary of Hunt Companies,
Inc. ("Hunt") and the concurrent mutual termination of its
management agreement with Oak Circle Capital Partners LLC
("OCCP").
Management by Hunt is expected to provide Five Oaks with a new
strategic direction through the reallocation of capital into new
investment opportunities focused in the commercial real estate
mortgage space and direct access to Hunt's significant pipeline of
specified transitional floating-rate multi-family and commercial
real estate loans. Hunt and its affiliates have extensive
experience in the origination, servicing, risk management and
financing of this asset class and the floating-rate nature of the
loans should reduce or eliminate the need for complex interest-rate
hedging. The new management agreement is expected to better
align the interests of Five Oaks and its new manager through an
incentive fee arrangement and agreed upon limitations on manager
expense reimbursements from the Company, among other items, as
further described in the Company's Form 8-K referenced below.
Hunt Investment Management, LLC is an SEC registered investment
advisor with nearly $2.0 billion of
real estate assets managed in funds, separate accounts and other
portfolios, across all real estate sectors and properties located
in the US. The activities of Hunt's affiliates and investees
include investment management, mortgage banking, direct lending,
loan servicing, asset management, property management, development,
construction, consulting and advisory. Pursuant to the terms
of the termination agreement between Five Oaks and OCCP, the
termination of the management agreement did not trigger, and OCCP
was not paid, a termination fee by Five Oaks. Hunt separately
agreed to pay OCCP a negotiated payment in connection with the
foregoing.
In connection with the transaction, an affiliate of Hunt
purchased 1,539,406 shares of the Company's common stock in a
private placement by the Company, at a purchase price of
$4.77 per share resulting in an
aggregate capital raise of $7,342,966.62. In addition, an affiliate of
Hunt also purchased 710,495 Five Oaks shares from the Company's
largest current shareholder, XL Investments Ltd, for the same price
per share. The purchase price per share represents a 56.9%
premium over the Five Oaks common share price as of the closing on
January 17, 2018. In connection
with the acquisition of shares from XL Investments, XL Investments
agreed to terminate all of its currently held Five Oaks
warrants. After completion of these share purchases, Hunt and
its affiliates own approximately 9.5% of Five Oaks outstanding
common shares.
Also in connection with the transaction, Mr. David Carroll resigned as a director, Chairman
and CEO of the Company and the Five Oaks board appointed James C.
("Chris") Hunt as a director and Chairman of the board and named
James P. Flynn as CEO of Five Oaks
and Michael P. Larsen President of
Five Oaks. Mr. Flynn currently serves as President and CIO of
Hunt's commercial real estate lending unit and Mr. Larsen serves as
COO and CFO of Hunt's commercial real estate lending unit. It
is expected that current Five Oaks executives, David Carroll, David
Oston, and Paul Chong, will
sign employment agreements with Hunt and a majority of the current
employees of OCCP will become employees of Hunt. Following the
transaction, the Board will continue to be comprised of a majority
of independent directors.
Chris Hunt, Chief Executive
Officer of Hunt stated, "I look forward to joining the Five Oaks
Board and working with the Company to help build value for all
stockholders. I believe that our investment today in Five
Oaks demonstrates our belief in the platform and future success of
the Company and aligns the interests of Hunt as external manager
with those of the stockholders of Five Oaks as we seek to grow the
Company in the coming years."
James Flynn, the new CEO of Five
Oaks, stated, "With access to the breadth and scale of the Hunt
platform, we believe Hunt will provide value and stability for the
stockholders of Five Oaks. Hunt's significant expertise in
commercial real estate lending and access to commercial real estate
investment opportunities will enable Five Oaks to expand its
investment strategy. In addition, we expect Five Oaks to benefit
from the scale of Hunt's investment management platform to reduce
expense levels and increase its capital base."
David Carroll, the former CEO and
Chairman of Five Oaks stated, "I am fully supportive of the
transactions announced today. I believe that gaining access
to Hunt's wide-ranging commercial real estate platform, proven
track record and highly seasoned management team will deliver
positive benefits to the Company and its stockholders.
Increased access to the floating-rate transitional loan origination
pipeline, particularly in the multi-family space, should allow us
to transition the Company's portfolio towards attractively priced,
high quality loans that are positively correlated to rising
interest rates and financed with term repurchase facilities or
collateralized loan obligation financing. I believe this will
be positive for stockholder returns moving forward."
Mr. William A. Houlihan, Five
Oaks' lead independent director, stated, "We are excited by this
transaction and our partnership with Hunt. We believe that
Hunt's stewardship will be beneficial to the Company and our
stockholders and we look forward to Chris
Hunt's insights and perspectives as a member of our
Board."
The foregoing description of the transactions, including the
terms of the new management agreement, does not purport to be
complete. For more information, please review the Company's
Current Report on Form 8-K to be filed with the Securities and
Exchange Commission on or about January 18,
2018.
Dentons US LLP served as Five Oaks' legal advisors. Paul,
Weiss, Rifkind, Wharton & Garrison LLP served as Hunt's legal
advisors.
About Five Oaks Investment Corporation
Five Oaks Investment Corp. is a real estate investment trust
("REIT") focused with its subsidiaries on investing on a leveraged
basis in mortgage and other real estate-related assets,
particularly mortgage-backed securities ("MBS"), including
residential mortgage-backed securities ("RMBS") and multi-family
mortgage-backed securities ("Multi-Family MBS"), and mortgage
servicing rights. The Company's objective remains to deliver
attractive cash flow returns over time to its investors. Investors,
security holders and other interested persons may find additional
information regarding the Company at the SEC's Internet site
at http://www.sec.gov/ or the Company website
www.fiveoaksinvestment.com or by directing requests to: Five Oaks
Investment Corp., 540 Madison Avenue, 19th Floor, New York, NY 10022, Attention: Investor
Relations.
About Hunt Companies, Inc.
Founded in 1947, Hunt Companies, Inc. is today a holding company
that invests in businesses focused in the real estate and
infrastructure markets. The activities of Hunt's affiliates and
investees include investment management, mortgage banking, direct
lending, loan servicing, asset management, property management,
development, construction, consulting and advisory. To learn more
about Hunt, please visit www.huntcompanies.com.
Hunt Investment Management, LLC, a wholly owned
subsidiary of Hunt Companies, Inc., is an SEC registered investment
advisor with nearly $2.0 billion of
real estate assets managed in funds, separate accounts and other
portfolios, across all real estate sectors and properties located
in the US for 13 funds/separate accounts for more than 66
institutional clients. In addition, Hunt is the external
manager of MMA Capital Management, LLC (NASDAQ: MMAC).
Hunt Mortgage Group, LLC, a wholly owned subsidiary of
Hunt Companies, Inc., is a leader in financing commercial real
estate throughout the United
States. Hunt Mortgage Group, finances all types of
commercial real estate: multifamily properties (including small
balance), affordable housing, office, retail, manufactured housing,
healthcare/senior living, industrial, and self-storage facilities.
It offers Fannie Mae, Freddie Mac, HUD/FHA in addition to its own
Proprietary loan products. Since inception, Hunt Mortgage Group has
structured more than $21 billion of
loans and today maintains a servicing portfolio of more than
$13.4 billion. Headquartered in
New York City, Hunt Mortgage Group
has 232 professionals in 25 locations throughout the United States. To learn more, visit
www.huntmortgagegroup.com.
Cautionary Statement Regarding Forward-Looking
Information
This communication contains forward-looking information about
Five Oaks, Hunt and the proposed transaction. Forward-looking
statements are statements that are not historical facts. These
statements can be identified by the use of forward-looking
terminology such as "believe," "expect," "may," "will," "should,"
"project," "could," "plan," "goal," "potential," "pro forma,"
"seek," "intend" or "anticipate" or the negative thereof or
comparable terminology, and include discussions of strategy,
financial projections, guidance and estimates (including their
underlying assumptions), statements regarding plans, objectives,
expectations or consequences of announced transactions, and
statements about the future performance, operations, products and
services of Five Oaks and its subsidiaries. Five Oaks and Hunt
caution readers not to place undue reliance on these statements.
These forward-looking statements are subject to a variety of risks
and uncertainties. Consequently, actual results and experience may
materially differ from those contained in any forward-looking
statements.
SOURCE Five Oaks Investment Corp.
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SOURCE Five Oaks Investment Corp.