CWCapital has been acquired by Fortress Investment Group in the third major acquisition of a special servicer in the past year.
While CWCapital's mortgage origination business has been steadily growing, it's the company's special servicing division, the nation's second largest, that primarily attracted Fortress. The acquisition brings to Fortress a wealth of data that will inform the company's strategy for capitalizing on distress.
Fortress was also attracted to the breadth of CWCapital—the mortgage origination, prime servicing, and investment advisory businesses offer procyclical growth opportunities as well.
Much like with Centerline and Capmark, CWCapital's growth aspirations had been hampered by its parent company's problems. CWCapital's former owner, Canadian pension fund Caisse de Depot et Placement du Quebec, has been saddled with losses and announced that it would be slashing its real estate investments. So, CWCapital asked if it could be sold, in hopes of a more supportive parent.
Indeed, the company's agency origination business has continued to grow. In 2009, the company closed more than $1 billion in Fannie Mae and Freddie Mac loans, and another $330 million in FHA deals. Coincidentally, Fortress' CEO is former Fannie Mae CEO Daniel Mudd.
No major changes are planned for CWCapital's management team, and the firm remains headquartered in Needham, Mass. As expected, the deal closed in the third quarter. The terms were not disclosed.