Castlelake and Invictus Capital Partners Join Forces for $2 Billion Investment in Residential Loans

Castlelake and Invictus Capital Partners Form a Strategic Partnership

In a significant move in the financial investment landscape, Castlelake L.P. has announced a strategic partnership with Invictus Capital Partners aimed at investing up to $2 billion in newly-originated residential mortgages. With Castlelake's extensive experience in asset-based private markets spanning two decades, this alliance marks a pivotal moment for both firms as they enhance their positions in the ever-evolving residential credit market.

The Nature of the Investment

The primary objective of this collaboration is to provide investors with access to a portfolio of high-quality mortgage whole loans. This endeavor is integral to scaling up Invictus's existing loan investment platform. According to Isaiah Toback, Partner and Deputy Co-CIO at Castlelake, this partnership will leverage Invictus's adept loan sourcing and credit underwriting practices, which resonate with Castlelake's data-driven investment philosophy and emphasis on downside risk protection.

Statements from Leadership

Isaiah Toback expressed enthusiasm regarding the partnership, underscoring, "We are pleased to engage with Invictus, who we believe has a loan sourcing and credit underwriting approach that aligns with our granular data-driven investment philosophy and focus on downside protection." He conveyed an optimistic outlook on the potential for scaling loan investment capabilities and achieving favorable pricing in the private residential loan market, particularly as this sector showcases signs of strong growth.

Conversely, Michael Warden, Senior Managing Director and CEO at Invictus, noted the importance of this relationship, reflecting on the acknowledgment from experienced alternative investment managers about the promising opportunities that exist within high-quality residential loans. He stated, "Castlelake's support affirms our belief that residential private credit deserves a featured position in an alternative credit portfolio," demonstrating the synergy between the firms’ visions.

Background on both Firms

With over 20 years in the field, Castlelake has established a notable track record in acquiring and financing around $7 billion in both residential and commercial real estate loans since 2024. The firm prides itself on its meticulous approach to asset-based investment, managing approximately $25 billion on behalf of a diverse global investor base, made up of a dedicated team of over 220 employees across North America, Europe, and Asia.

On the other hand, Invictus Capital Partners has made significant strides in residential loan investments since its inception in 2008, having acquired over 70,000 loans, which collectively exceed $35 billion in balance. With assets exceeding $20 billion, Invictus specializes in the residential credit sector, focusing on a wide array of debt investments that span from high-yielding to distressed loans and bonds.

Conclusion

Through this partnership, both Castlelake and Invictus aim to capitalize on the growing demand and opportunities in the residential loan market. By pooling their resources and expertise, the firms are positioned to deliver substantial value to their investors while navigating the complexities of the current financial landscape. Together, they are set to enhance their operational capabilities in a lucrative and essential part of the financial services industry.