Hunt Companies Finance Trust, Inc.'s independent directors on Jan. 3 approved a new management agreement with ORIX Corporation USA unit, OREC Investment Management LLC.
The initial term of the agreement ends Jan. 3, 2023, and automatically renews for successive one-year terms in each Jan. 3 thereafter, unless it is sooner terminated, according to a filing.
OREC Investment Management is the combination of RED Capital Group, Lancaster Pollard and Hunt Real Estate Capital LLC, following ORIX Corp. USA's acquisition of the latter. The combined platform has an annual loan production of over $9 billion and a servicing portfolio of more than $40 billion, according to a news release.
Hunt Cos. Finance Trust on Jan. 3 also entered into a termination agreement with Hunt Investment Management LLC for its existing management agreement, dated Jan. 18, 2018. Under the terms of the agreement, the company will not pay Hunt Investment a termination fee. ORIX Corp. USA separately agreed to pay Hunt Investment a negotiated payment in connection with the transaction.
Additionally, an affiliate of ORIX Corp. USA bought 1,246,719 common shares of Hunt Cos. Finance Trust in a private placement at a purchase price of $4.61 per share, for an aggregate amount of $5.7 million. The purchase price per share represents a 43% premium over the company's share price on Jan. 2. After completing the share purchase, the ORIX Corp. USA affiliate will own about 5% of Hunt Cos. Finance Trust's outstanding common shares.
In connection with the transaction, Hunt Cos. Finance Trust Chairman James Hunt resigned from his post, but will remain as director. Interim CFO James Briggs was named CFO of the company. James Flynn will continue as CEO, while Michael Larsen will remain president.