Global asset manager Bain Capital announced Monday that it has acquired a controlling stake in Archwest Capital, a California-based company that offers financing to residential real estate investors.
The financial terms of the deal were not disclosed, but the companies said in a joint statement that Archwest management, led by CEO Shawn Miller, would retain a “significant minority stake.“
“We are pleased to partner with Shawn and the Archwest team to deliver dynamic financing solutions to home builders, renovators and landlords who are expanding and improving the critically undersupplied U.S. housing stock,” David DePrez, managing director for Bain Capital, said in prepared remarks.
“We believe that combining the Archwest team’s deep lending and operational capabilities with a bespoke capital solution from Bain Capital sets Archwest up to be the leader in the non-owner occupied residential lending space.”
Archwest provides business-purpose financing for single-family and multifamily homes, as well as mixed-use and commercial properties. Its product mix includes fix-and-flip loans, bridge loans and construction loans. It has reportedly originated more than $700 million in funding since 2022.
“Today more than ever, real estate investors and developers need reliable lending partners who are agile and can provide certainty of execution to solve their complex financing needs,” Miller said in a statement. “Bain Capital shares our vision for building Archwest into the leader for U.S. business purpose lending, and we look forward to leveraging their resources and operational capabilities to further enhance our innovative product suite and strengthen our value-added proposition to our borrowers and broker partners.”
Irell & Manella LLP acted as legal adviser to Archwest in negotiatons, while Piper Sandler Companies was the financial adviser and Dechert LLP was the legal adviser to Bain Capital.
Bain Capital has more than 1,750 employees worldwide and manages roughly $185 billion in assets. In March, its venture capital arm was part of a $30 million funding round to mortgage verifications provider Argyle. The firm is also a major investor in Hometap, one of the larger players in the home equity investment space.
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Kiavi, one of the nation’s largest private lenders for residential real estate investors, closed a $300 million unrated securitization of residential transition loans (RTLs), the company announced on Friday.
The loans bundled in the securitization were mostly investment property loans used for fix-and-flip transactions. This securitization marked Kiavi’s 17th such transaction and elevated the company’s total issuance to more than $4.3 billion since it launched its securitization program in 2019.
The deal drew significant interest from institutional investors. Consistent with prior transactions, investors will benefit from a two-year revolving period during which they can reinvest their principal payoffs to purchase additional newly originated loans.
Barclays Capital was the sole entity responsible for structuring the deal. Barclays, Nomura Securities International and Performance Trust Capital Partners were joint bookrunners and co-lead managers on the transaction.
“This additional capital fuels our continued growth, enabling us to help even more real estate investors scale their businesses,” Arvind Mohan, CEO of Kiavi, said in a statement. “Because of our advanced data models, technology platform, and consistent track record of performance, we continue to see significant institutional demand for Kiavi’s RTL assets.”
The deal followed on the heels of a $350 million securitization by Kiavi in March. The lender also reported that it originated $1.66 billion in fix-and-flip and bridge loans in the first four months of 2024, a 40% increase over the same period in 2023, and it recently expanded into construction financing.