The DBRS Morningstar's finalized ratings criteria for the new U.S. Home Equity Investments asset class, coupled with the increasing investor demand for scalable investment opportunities into the largest asset class in the world - owner-occupied residential real estate - reflects the heightened confidence in Home Equity Sharing Agreements as a reliable and gainful asset.
SAN FRANCISCO, CA / ACCESSWIRE / September 18, 2023 / Unison, the pioneer of equity sharing agreements, closed a securitization of $165 million of assets, supporting such agreements nationwide and increasing access to institutional investors who want to participate in the novel, lucrative sector of the U.S. Home Equity Investments (HEI) asset class. This transaction, arriving on the heels of a turbulent market, reflects growing confidence in equity sharing agreements as a reliable, gainful asset.
After a previous short-term decline, home prices have leveled off and sprung to life. Over the last three months, annualized HPA totaled 17.2%-triple the historical average. However, homeowners struggle to unlock trapped equity, as traditional solutions require them to take on additional debt. This transaction increases liquidity for homeowners seeking to consolidate their debt, renovate their homes, save for retirement, and practice financial wellness. Unison proudly offers this innovative option both for homeowners in need and investors pursuing efficient and scalable investment opportunities into the largest asset class in the world: owner-occupied residential real estate.
The transaction closed June 9, 2023, and included Barclays and Performance Trust as the structuring agent and bookrunner, respectively. Mayer Brown, LLP served as the legal representative of the issuer, and Hunton Andrews Kirth, LLP as the legal representative of the initial purchasers.
Coupled with the news that DBRS Morningstar finalized the ratings criteria for the HEI asset class, the transaction further validates HEI as a mainstream asset for institutional and other investors. During the COVID era, the market became uncertain, even precarious; though it has been on the upswing since the pandemic's peak, it remains shy of confident stability. This transaction demonstrates that Unison, who pioneered the equity sharing agreement and institutionalized the HEI asset class, is at the forefront of its formalization and recognition of its durability.
"The fact that we are able to securitize in this environment speaks volumes to the validity of our asset class," adds Unison Chief Investment Officer Matt O'Hara. "We look forward to the upcoming rating from DBRS Morningstar, which further confirms the potency and potential of home equity investments on a larger scale."
As a market leader, Unison Investment Management (UIM) helps homeowners access the accumulated value of their homes while enabling institutional investors to access U.S. residential home price appreciation. Investing in homes since 2006, UIM currently manages $1.69B in residential equity agreements and has a 10+ year track record of 17.0% annualized net returns since 2010. Their portfolios provide low-volatility and high-risk-adjusted net returns relative to other major asset classes.
Unison is a Delaware corporation based in San Francisco and Omaha that is pioneering a smarter, better way to own your home. Until now, the only way to finance a home was by taking on debt. Through Unison residential equity agreements, we help homeowners access their equity flexibly with no monthly payments or interest. We enhance home affordability, reduce debt, and deliver a less risky way for homeowners, investors, and society to think about that important asset - the home. Unison Investment Management, LLC is a Delaware limited liability company that serves as investment manager to Unison's investment funds and separately managed accounts. It powers efficient capital deployment and active management at scale. Our investment philosophy is ingrained in the models, systems, and processes we build to make investments. We are committed to providing institutional investors unrivaled transparency and innovative product offerings for this new asset class. For additional information, visit www.unison.com and www.unisonim.com.
Helene Ton Anderson
VP of Marketing