Oaktree Capital Management has acquired $1.7 billion of distressed real estate loans from Am Trust, the Ohio-based bank, in an auction held by the Federal Deposit Insurance Corporation (FDIC).
According to a report by the Financial Times, Oaktree partnered with luxury home builder Toll Brothers in its bid for the loan book which comprises approximately 280 loans with an average value of $6 million each.
The auction win follows another by a private equity firm, Colony Capital, which earlier this week captured a 40 percent position in a book of 1,660 loans for $445 million. Colony made its investment, its second through FDIC auctions, via a joint bid with Cogsville Group.
FDIC purchased the other 60 percent of those loans, which had a face value of $1.85 billion and were from 22 failed banks, according to a FDIC statement on the matter.
Loans from FDIC have become a popular source of deals for many investment houses of late. According to the FT many which have acquired loans from the US banking regulator have already “aggressively” marked up their investments.
The newspaper pointed to global private equity giant TPG, which purchased loans formerly owned by ST Residential, the former Corus Bank, for $225 million just months before revaluing its investment at $241 million.