NEW YORK, June 26, 2023 – MAXEX, LLC (MAXEX), South Street Securities Holdings, Inc. (South Street) and Atlas Merchant Capital, LLC (Atlas) announced today a strategic partnership to expand liquidity in the highly fragmented U.S. mortgage secondary market.
MAXEX closed an equity investment, led jointly by South Street and Atlas which also included participation from several of the company’s existing investors including J.P. Morgan and Moore Asset Backed Fund, LP. Additionally, South Street will also provide capital support behind MAXEX’s existing clearinghouse facility, further enhancing MAXEX’s counterparty strength by leveraging South Street’s investment-grade rating and approximately $30 billion balance sheet. Terms of the transaction were not disclosed.
MAXEX’s mission is to serve as a market utility and liquidity provider for the U.S. mortgage markets.
The strategic investments from Atlas and South Street position MAXEX for significant growth and further solidify the company’s position as an independent mortgage market utility. Additionally, MAXEX, South Street and Atlas will collaborate to accelerate industry adoption of MAXEX’s platform while expanding access to MAXEX and South Street’s products and services across the more than 500 market participants currently served by both organizations.
About the parties involved:
“Recent market volatility emphasized the need for fundamental change in the mortgage secondary market as lenders and investors struggled to adapt to rapidly rising rates, liquidity shortages and the need to operate with more nimble, flexible infrastructure,” said Jim Tabacchi, President and CEO of South Street. “MAXEX expands access to a broad range of non-agency and agency eligible mortgage loan programs. This partnership enhances our offering and TBA pipeline hedging platform by giving clients access to MAXEX’s loan trading exchange.”
“MAXEX’s mission is to serve as a market utility and liquidity provider for the U.S. mortgage markets,” said Tom Pearce, CEO, Chairman, and co-founder of MAXEX. “As our exchange has grown, our value proposition and the significant operational efficiencies we provide have become increasingly clear to the industry. This partnership enables us to further accelerate our growth, expand our product suite and broaden our network.”
“South Street and MAXEX have established themselves as pioneers of modern infrastructure that is critical to mortgage trading and liquidity,” said David Schamis, Founding Partner and CIO of Atlas. “This partnership is core to our strategy of investing in and growing financial services companies that benefit from our long-term perspective, partnership approach and operating expertise.”
Houlihan Lokey served as exclusive financial advisor to MAXEX in connection with the transactions. Katten Muchin Rosenman served as legal advisors to South Street and Atlas Merchant Capital in connection with these transactions.
MAXEX is the first digital mortgage exchange to enable buying and selling residential loans through a single clearinghouse. The company connects a growing network of over 300 bank and non-bank lenders with premier investors including Wall Street banks, real estate investment trusts and insurance companies to enable faster, more efficient liquidity. MAXEX is an Atlanta-based fintech company led by mortgage experts and financially backed by leading private equity and capital markets investors. Learn more by visiting www.maxex.com.
South Street Securities Holdings, Inc. operates through its subsidiaries. Affiliates include South Street Securities LLC, a FINRA and SPIC member, who holds a FICC Tier 1 membership and is focused on the following businesses, repo dealer financing US Treasuries, Agency MBS, TBA mortgage origination hedging and equity finance. Matrix Applications, LLC, a technology and back-office services company, South Street Capital Management, LLC, an asset management company, and AmeriVet Securities, Inc., a FINRA and SPIC member who operates an SEC registered service-disabled veteran and minority owned broker dealer.
Atlas Merchant Capital LLC was founded to participate in compelling market opportunities in the financial services sector. Based in New York and London, The company was founded by Bob Diamond and David Schamis, who, together with their partners, form a complementary partnership with extensive operating and investing expertise across the financial services landscape. Learn more by visiting www.atlasmerchantcapital.com.