Brookfield Asset Management backed-Castlelake plans to acquire up to $8bn (€6.84bn) in premium US residential mortgage loans through a new partnership with Redwood Trust.
As part of the partnership, Castlelake has agreed to acquire prime jumbo mortgage loans, that rely heavily on private capital and are charcterised by high credit quality, sourced by the Redwood residential mortgage business Sequoia. The joint venture also has the flexibility to scale as opportunities emerge, including the acquisition of seasoned loans from bank balance sheets.
Brooke Carillo, executive vice president and CFO at Redwood Trust, said: ”Sequoia has experienced significant momentum over the past year, with loan acquisition volumes more than doubling as we continue to build share in the jumbo market.
“We see a dynamic and expanding opportunity set ahead, and this initiative is aligned with our strategy of scaling our platforms alongside leading capital providers. Castlelake’s large, diversified institutional capital base and experience in asset-based investing make them a strong partner as we continue to grow Sequoia.”
Lucas Jackson, head of North American residential mortgage finance at Castlelake, said: ”Castlelake is pleased to partner with Redwood and its Sequoia platform to provide our investors with access to what we expect to be high-quality, fully documented prime jumbo assets and to establish a relationship grounded in shared principles of disciplined underwriting and strong institutional governance.
“This transaction highlights Castlelake’s granular, loan-level approach to deploying capital into opportunities that we expect to create attractive, risk‑adjusted outcomes for our investors.”
In September 2024, Brookfield acquired a 51% stake in Castlelake’s fee-related earnings, while Brookfield Wealth Solutions committed to investing in the firm’s investment strategies and private funds.
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