When Steve Kennedy and Kass Matt chose April 1, 2020 to launch their new financial venture, Vium Capital, they had no idea that they would be entering a chaotic capital markets landscape.
“We picked this date out six months ago,” Kennedy told Senior Housing News.
Vium is launching as real estate capital markets enter an environment of peak volatility created by the Covid-19 pandemic. Most lenders have retreated to the sidelines and are only servicing existing customers for the time being. But senior housing’s need-based, recession-resilient components give it access to limited sources of liquidity — namely, HUD, Fannie Mae and Freddie Mac financing.
Kennedy and Matt — with a combined 32 years experience at Lancaster Pollard — believe that their business model is perfectly suited for strong senior housing operators seeking bridge financing through HUD and the agencies, Matt told SHN.
Vium Capital also marks a return to their roots. Matt joined Lancaster Pollard in 2006 and rose up the ranks to president, while Kennedy was the firm’s second intern ever in 2001 and was most recently on the firm’s executive committee. As Lancaster Pollard grew — ultimately becoming the nation’s top lender in the FHA 232 mortgage insurance program — the pair discussed starting their own firm, narrowing their business focus to a limited range of borrowing and a specific real estate product type, and doing it well.
They decided to leave just before Lancaster Pollard’s parent company, ORIX Corporation USA, agreed to acquire Hunt Real Estate Capital last November.
“As [Lancaster Pollard] grew, we wanted to return to a back to basics approach of servicing the client,” Matt said.
Vium is launching with a well-capitalized lender in place — a bank which Kennedy and Matt would not identify to SHN. The pair had a Fannie Mae license to work with at Lancaster Pollard, but never a direct bank capital partner to work with. Adding Freddie Mac is another tool they previously lacked.
The new capital markets landscape is ripe for Vium to place traditional bridge loans with strong operators seeking an influx of liquidity, and the firm’s capital partner is aggressively seeking placements.
“We are absolutely open for business,” Kennedy said.
As Vium gains traction, the partners believe that it can be the leading HUD lender in the senior care space, capable of working with nonprofit operators as the municipal advisor, and with for-profit operators seeking tax-exempt debt.
The new firm also has the ability to do some stretch loans and mezzanine pieces, with the right sponsors. As the firm grows, Kennedy and Matt want to maintain its core focus.
“Vium is designed to be nimble, lean and entrepreneurial. We don’t want to be so expansive so that we solve everything, and simply hone in on clients,” Matt said.
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