Deepak Narula said he wants to take the guesswork out of investing in the U.S. housing market.
His $1.9 billion firm, Metacapital Management LP, the top-performing hedge fund in 2012, plans to start a fund to invest in the debt of delinquent borrowers who haven’t lost their homes to foreclosure, according to an April 24 letter to investors, a copy of which was obtained byBloomberg News. The Metacapital Mortgage Loan and Credit Fund will start in the third quarter.
There are more than 1 million properties in the U.S. tied to loans at least 90 days late and not yet in foreclosure, according to Black Knight Financial Services. Another 4.5 million borrowers are at least 30 days delinquent or in the repossession process, according to a Black Knight report in February.
Investors in the soured mortgages can either work with borrowers to modify the loans and help them keep their homes or put the properties through foreclosure and take ownership. Then they have the option to sell or rent. Hedge-fund and private-equity firms have dominated U.S. foreclosure auctions in the last two years by buying as many as 200,000 single-family homes to rent.
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