Ellington Targeting Bridge Loans, Plans CLO
Add Ellington Management to the growing list of shops that have jumped into the booming bridge-loan market.
The hedge-fund operator plans to write $300 million to $500 million of middle-market bridge loans over the next 12 months. It will package the loans into a CLO.
The Old Greenwich, Conn., investment manager has hired originator Brian Neilinger to focus on the lending activity. Neilinger, a managing director, reports to senior portfolio manager Leo Huang, who oversees Ellington’s commercial real estate debt investments.
Neilinger previously was a managing director of Full Circle Capital of Greenwich, Conn., focusing on corporate-debt workouts and restructurings. He left Full Circle at yearend 2016 after a three-year stint and then worked as a consultant. He previously worked at Aladdin Capital of Stamford, Conn., and CIBC.
Ellington will write loans on transitional properties of all types across the country. It will focus on loans of $10 million to $25 million, although it is willing to go as high as $100 million. The program is capitalized with equity from multiple Ellington funds and separate accounts. It will also use leverage.
The company will continue to invest in commercial MBS, including B-pieces. In recent months, it began buying subperforming and distressed mortgages, which was a step toward launching the origination platform. Following a long hiatus, Ellington resumed issuing CLOs in 2017. So far, that effort has produced two deals, totaling $828 million, backed by corporate debt and residential mortgages.
Ellington, led by founder Michael Vranos, has $6.6 billion under management.