ALTERNATIVE | INSURANCE
The Residential Debt strategy seeks to capitalise on opportunities in the US housing market by providing exposure to mortgage loans collateralised by residential investment properties. The strategy focuses on addressing the housing shortage and capturing value through three complementary approaches: residential transition loans, lender finance, and direct lending.
The strategy emphasises careful asset selection, strong underwriting standards, and protective loan structures to manage risk effectively and support long-term performance. The strategy is supported by an experienced team led by Eric Atlas, whose career in real estate debt began in 2006.
Key characteristics
Residential transition loans (RTLs)
We invest in short-term loans that fund the purchase, renovation, and sale of single-family properties. These loans help upgrade older housing stock and meet the demand for affordable housing
Lender finance
We provide structured financing to originators of residential loans, backed by highly granular and diversified mortgage pools. Facilities include revolving term loans and warehouse financing
Direct lending
This involves directly originated, floating-rate loans secured by multifamily, single-family rental (SFR), and build-to-rent (BTR) properties. These loans support development and stabilisation projects, featuring institutional sponsorship and exit strategies aligned with agency financing
This strategy overview is for information purposes to illustrate the capabilities and approach of relevant investment teams at Man Group. Any organisations, financial instrument or products described herein are mentioned for reference purposes only which should not be considered a recommendation for their purchase or sale.
The below highlights some key potential risks associated with this strategy and should not be considered a comprehensive list.
Property Risk - Property is a specialist sector that may be less liquid and product more volatile performance than an investment in other investment sectors. The value of capital and income will fluctuate as property values and rental income rise and fall. The valuation of property is generally a matter of valuers' opinion rather than fact. The amount raised when a property is sold may be less than the valuation.
Investment Objective Risk - There is no guarantee that the Strategy will achieve its investment objective.
Market Risk - The Strategy is subject to normal market fluctuations and the risks associated with investing in international securities markets and therefore the value of your investment and the income from it may rise as well as fall and you may not get back the amount originally invested.
Counterparty Risk – Differing market standards for counterparty credit evaluation may expose the Strategy to the risk that a counterparty will not complete or settle a transaction in accordance with its terms and conditions because of a dispute over the terms of the contract (irrespective of whether bona fide), counterparty default, or inability to perform, causing the Strategy to suffer a loss.
Currency Risk - The value of investments designated in another currency may rise and fall due to exchange rate fluctuations. Adverse movements in currency exchange rates may result in a decrease in return and a loss of capital. It may not be possible or practicable to successfully hedge against the currency risk exposure in all circumstances.
Liquidity Risk - The Strategy may make investments or hold trading positions in markets that are volatile and which may become illiquid. Timely and cost efficient sale of trading positions can be impaired by decreased trading volume and/or increased price volatility.
Single Region/Country Risk - The Strategy is a specialist country-specific Strategy or focuses on a particular geographic region, the investment carries greater risk than a more internationally diversified portfolio.
Tax Risk - The tax advantages this strategy seeks to take advantage of may not be available to all investors, consult with your tax professional prior to making investment decisions.
Political Risk - The Strategy may be subject to additional risks which include possible adverse political and economic developments, possible adoption of governmental restrictions which might adversely affect the payment of rent, principal, interest and other amounts to investors located outside the country where the property is located, whether from currency blockage or otherwise. In addition, political or social instability or diplomatic developments could affect investments in those countries. While the Firm will take these factors into consideration in making investment decisions for the Strategy, no assurance can be given that the Strategy will be able to avoid these risks.
Credit Risk - The Strategy may invest directly or indirectly in debt instruments. The debt instruments may be subject to the risk that the principal or interest of such instruments may not be paid. It is possible that increased credit risk may prevent the investment objective from being achieved. Adverse changes in the financial condition of the issuer, or in general economic conditions, or both, or an unanticipated rise in interest rates, may impair the ability of the issuer to make payments of interest and principal. The inability (or perceived inability) of issuers to make timely payments of interest and principal may affect the value of securities held for the account.
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Opinions expressed are those of the author and may not be shared by all personnel of Man Group plc (‘Man’). These opinions are subject to change without notice, are for information purposes only and do not constitute an offer or invitation to make an investment in any financial instrument or in any product to which the Company and/or its affiliates provides investment advisory or any other financial services. Any organisations, financial instrument or products described in this material are mentioned for reference purposes only which should not be considered a recommendation for their purchase or sale. Neither the Company nor the authors shall be liable to any person for any action taken on the basis of the information provided. Some statements contained in this material concerning goals, strategies, outlook or other non-historical matters may be forward-looking statements and are based on current indicators and expectations. These forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to update or revise any forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those contained in the statements. The Company and/or its affiliates may or may not have a position in any financial instrument mentioned and may or may not be actively trading in any such securities. Unless stated otherwise all information is provided by the Company. Past performance is not indicative of future results.
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