Fortress Investment Group, which controls a large chunk of Nationstar Mortgage, has launched a $500 million private equity fund with a stated goal of buying mortgage servicing rights.
The fund is currently taking commitments and will close to new investors by the end of August, according to a recent 8-K filing by the publicly traded hedge fund manager.
Nationstar is one of a handful of bidders that is considering offers on Residential Capital Corp., and its $380 billion servicing portfolio. Other potential buyers include Ocwen Financial Corp., and Berkshire Hathaway.
Fortress, once headed by former Fannie Mae chairman and CEO Daniel Mudd, recently reported second quarter earnings of $14 million. But in the first quarter it lost $24 million, and in 2Q 2011 it spilled $246 million of red ink.
At June 30, Fortress had cash and cash equivalents of $184 million, down from $249 million as of March 31, 2012 primarily due to the repayment of debt obligations, the company said.
At quarter’s end, Fortress also had outstanding debt obligations of $189 million, compared to $253 million in 1Q.
In the second quarter Fortress raised $267 million for Newcastle Investment Corp., a publicly traded REIT that investments in MSRs. Fortress and Newcastle share the same senior executive: Wesley Robert Edens.