Chimera Investment Corporation is acquiring US-based alternative asset manager Palisades Group, for up to $50m (€46m), to expand its reach in the residential credit market and diversify its income sources.
The NYSE-listed real estate investment trust is buying Palisades for $30m and will make an additional payment of up to $20m over five years based on certain financial targets being met.
Once the transaction is complete, Jack Macdowell Jr, co-founder and CIO of Palisades, will become Chimera’s CIO.
Palisades, founded in 2012, specialises in managing and investing in residential real estate assets across various credit products.
Chimera mainly invests, both directly and indirectly, in a diversified portfolio of real estate assets, including mortgage loans, Agency RMBS, Non-Agency RMBS, Agency CMBS, business purpose and investor loans and other related assets.
The combined group will own, advise or manage over $30bn of notional loans and real estate assets.
Phillip J Kardis II, president and CEO of Chimera, said: “Palisades has a strong history in residential credit, providing customised asset and credit risk management solutions to large institutional investors and insurance companies, as well as investment advisory services to private credit funds. They have an excellent management team and seasoned investment professionals.
“Complementing Chimera’s permanent equity capital, this transaction is expected to broaden our residential credit reach to include managing assets for third parties and raising and investing private capital. We expect this acquisition to be accretive to Chimera’s earnings in 2025.”
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