A Texas investment firm has launched a new fund to invest in subordinated debt and take mezzanine stakes in what it calls “carefully selected” mortgage banking firms.

David Fleig, president of Financial Analysis Partners (FAP), LLC, Sugarland, Texas, said the new fund will concentrate on firms that have a minimum net worth of at least $5 million, strong management, and a history of posting solid earnings.

The fund is called Residential Mortgage Capital Partners and is managed by Fleig’s FAP.

Fleig said he sees a coming wave of change to the industry where changes brought on by coming change to Basel III rules and other servicing rules shakes the “oligopoly” enjoyed by the nation’s megabanks.

He added that the “looming impact” of these changes “heavily favors well managed ‘middle market’ mortgage bankers (which already have agency licenses) to take full advantage of loan pricing disparities, eliminate investor overlays and retain MSRs as wells as the mortgage REITS.”

Fleig provided his comments to National Mortgage News via email but could not be reached for additional comment regarding how much money the fund has to invest.

He said FAP believes in the theory that the mortgage banking sector could be headed for a wave of deconsolidation.

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