Pretium Congratulates Roberta Goss for Recognition as One of The Most Notable Women on Wall Street by Crain’s New York Business

PRESS RELEASE

Pretium Congratulates Roberta Goss for Recognition as One of The Most Notable Women on Wall Street by Crain’s New York Business

November 30, 2022

New York, NY – November 30, 2022 – Pretium, a specialized investment firm with approximately $50 billion in assets under management, today congratulated Roberta Goss, Senior Managing Director and Head of the Bank Loan and CLO Platform, for being named one of the “Most Notable Women on Wall Street” by Crain’s New York Business. Award recipients are selected by the Crain’s New York editorial team and recognize influential women who have made a positive impact on the New York City financial sector.

In her three years since joining Pretium, Ms. Goss has played an instrumental role leading the development of the firm’s Crown Point collateralized loan obligation (CLO) business and managing investments across its other leveraged loan portfolios. Pretium’s CLO and leveraged loan portfolio total approximately $3 billion in assets.

“We are incredibly proud to join Crain’s in recognizing Roberta’s leadership and contributions both within Pretium and beyond our organization’s walls,” said Don Mullen, Founder and CEO of Pretium. “Her deep expertise in the CLO space, combined with her abilities as a mentor to the many talented members of her team, brings tremendous value to our organization and the industry overall. We congratulate Roberta on this well-deserved honor.”

In addition to Ms. Goss’ responsibilities overseeing Pretium’s portfolio management and marketing efforts for the bank loan and CLO platforms, she is also heavily involved in mentoring future talent within the credit space. Ms. Goss helps manage the firm’s summer internship program with Girls Who Invest, a program that seeks to bring more women into portfolio management, and serves as co-head of Pretium’s Women’s Resource Group, an initiative focused on developing and fostering opportunities for the firm’s female employees. Ms. Goss is also a member of Pretium’s Executive and Finance Committees and was named to the Kayo Conference Series’ “Top 22 in ‘22: Leaders in Credit and Debt Finance.”

To read more about Ms. Goss’ recognition, please visit the Crain’s New York Business website.

About Pretium

Pretium is a specialized investment firm focused on U.S. residential real estate, residential credit, and corporate credit. Pretium was founded in 2012 to capitalize on secular investment and lending opportunities arising as a result of structural changes, disruptions, and inefficiencies within the economy. Pretium has built an integrated analytical and operational ecosystem within the U.S. housing, residential credit, and corporate credit markets, and believes that its insight and experience within these markets create a strategic advantage over other investment managers. Pretium’s platform has approximately $50 billion of assets and employs more than 4,000 people across 30 offices, including Dubai, London, Seoul and Sydney. Please visit www.pretium.com for additional information.

Media Contact

Josh Clarkson / Sheila Kulik
pro-pretium@prosek.com

Pretium’s Housing Insights, November 2022

INSIGHTS

Pretium’s Housing Insights, November 2022

November 30, 2022

Summary


The US is already underbuilding housing again, worsening the long-term supply shortage

Single-family housing construction has fallen meaningfully below long-term averages1

Rising rates have achieved the Federal Reserve’s intended effect of dampening housing demand and bringing down the rate of home price and rent growth. But increased demand was just one side of a historic supply-demand imbalance that drove rapid home price and rent growth during the pandemic. The other side was years of underproduction leading up to the pandemic, especially of single-family homes. The Fed induced rate shock may have brought housing supply & demand back into balance; however, it has also prompted builders and developers to sharply reduce rates of construction, particularly of single-family homes. Consensus forecasts call for rates of construction to continue to decline into 2023, which means the pandemic construction surge lasted less than two years. This wasn’t enough to address housing’s pre-pandemic housing shortage, let alone a post-pandemic housing market that could feature structurally higher levels of demand driven by factors such as hybrid work, increased migration, and an increased focus on the home. Longer-term, Pretium expects that the housing supply shortage is likely to remain a central driver of US housing market dynamics and that this supply shortage will be more pronounced for single-family vs. multifamily homes. 

Permits are the first step in the construction process and monthly permits trends provide an early gauge of overall housing construction levels. In October, US housing permits are down nearly 20% from their early 2022 peaks. As shown in Exhibit 1 this decline is almost entirely driven by declining single-family permits that are down roughly 30%; by contrast, multifamily activity is down just 5%. Single-family permits fell below the rate of single-family completions in June, so homebuilder construction backlogs have been declining since then. On the other hand, multifamily permits remain well above multifamily completions and construction backlogs are still increasing. In the near-term single-family homebuilders have curtailed production more sharply than multifamily developers because of the sensitivity of home purchase demand to rising mortgage rates; over the longer-term, Pretium believes that land and housing supply constraints are also more acutely felt in the single-family market. 

 

Starts represent ground-breaking for new homes and provide the longest time series for analyzing levels of construction. As shown in Exhibit 2, the average level of single-family starts since 1959 has been 1.02 mm. October’s single-family starts pace of 0.86 mm is 16% below this long-term average and consensus forecasts project construction levels to continue to decline in 2023. For example, Fannie Mae forecasts that single-family starts will decrease to 0.79 mm in 2023. Multifamily starts remain above their long-term average, but the decrease in single-family activity has been significant enough to drive overall housing starts below their long-term averages. If housing starts begin to recover in 2024 at the same roughly 6% annual growth rate the market experienced from 2013-19, it could take until 2027 for total housing starts to again exceed their long-term averages. This would result in a 20-year period from 2007-2026 where total housing starts only exceeded their long-term average for two years during the pandemic. 


1. Source: US Census, New Residential Construction, as of October 1, 2022; Fannie Mae Housing Forecast, as of October 10, 2022. 

This is not an offer, advertisement, or solicitation for interests in any Pretium managed vehicle and should not be construed or relied upon as investment advice or as predictive of future market or investment performance. Past performance is not indicative of future results.

Pretium Expands Global Business Development Team with Hiring of Rune Sanbeck as Managing Director in London Office

PRESS RELEASE

Pretium Expands Global Business Development Team with Hiring of Rune Sanbeck as Managing Director in London Office

November 14, 2022

Seasoned Executive to Lead Pretium’s European Fundraising Efforts, Business Development Strategy

NEW YORK – November 14, 2022 – Pretium, a specialized investment firm with approximately $50 billion in assets under management, today announced that Rune Sanbeck has joined the firm as Managing Director, Business Development. In this role, Mr. Sanbeck will lead fundraising, client support, and business development strategy for Europe-based allocators and institutional investors, primarily supporting Pretium’s real estate and private credit offerings.

Mr. Sanbeck brings over 20 years of experience and deep expertise identifying, implementing, and executing long-term growth strategies to expand institutional relationships and distribution efforts, with significant experience across private, public, and real asset classes. Most recently, Mr. Sanbeck served as Managing Director and Head of International Business at AIG First Principles. Prior to AIG, Mr. Sanbeck served as Head of EMEA, CEO of Nuveen UK, and Director of Nuveen Europe Asset Management. He has also held senior roles with BlackRock/BGI, Danske Capital, and Dimensional Fund Advisors.

“As we continue to build our diversified investment platform, we view Europe as a long-term strategic priority and are committed to ensuring we have the most talented and driven team in the industry,” said Don Mullen, CEO and Founder of Pretium. “Rune’s multifaceted business experience and global connections will strengthen our presence in Europe, and we are excited to welcome him to our team.”

“Rune’s extensive fundraising experience and growth-oriented track record are a natural fit for Pretium and our London-based business development team,” said Jennifer Strickland, Senior Managing Director and Head of Business Development at Pretium. “Rune has a deep network of relationships, an intimate understanding of the European institutional investment landscape, and a seasoned business acumen that we believe will enhance our capabilities to support new and existing clients.”

“Joining Pretium is an incredible opportunity to be part of one of the strongest and most innovative teams in the industry,” Mr. Sanbeck said. “I look forward to working alongside Eugenie Dadachpour in London and with colleagues around the world to support and expand Pretium’s network of institutional clients, while executing on long-term fundraising objectives for real estate and private credit.”

About Pretium

Pretium is a specialized investment firm focused on U.S. residential real estate, residential credit, and corporate credit. Pretium was founded in 2012 to capitalize on secular investment and lending opportunities arising as a result of structural changes, disruptions, and inefficiencies within the economy. Pretium has built an integrated analytical and operational ecosystem within the U.S. housing, residential credit, and corporate credit markets, and believes that its insight and experience within these markets create a strategic advantage over other investment managers. Pretium’s platform has approximately $50 billion of assets and employs more than 4,000 people across 30 offices, including Dubai, London, Seoul and Sydney. Please visit www.pretium.com for additional information.

Contacts

Jon Keehner / Kate Thompson / Lyle Weston
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449
Media-SFR@pretium.com

CLO Equity Delivered Strong Returns Through the Financial Crisis Period

INSIGHTS

CLO Performance Report, November 2022

November 10, 2022

Summary


CLO equity delivered strong returns through the financial crisis period

During the Global Financial Crisis (GFC) episode, default rates on the bonds issued by collateralized loan obligations, or CLOs, were far lower than those for other structured credit products such as CDOs, RMBS, CMBS, and ABS. Legacy structured finance CDOs (SF CDOs) and subprime RMBS had average annualized impairment rates of 24.1% and 10.0% respectively, vs. just 0.2% for CLO debt tranches (Exhibit 1). CLO equity tranches also performed well through the GFC. A study by researchers at the Federal Reserve Bank of Philadelphia finds that the median CLO equity tranches issued during 2005-2007 earned 13%-18% lifetime IRRs (Exhibit 2). In contrast, most of the equity and debt securities from RMBS, CMBS, and CDO transactions from the same period experienced negative returns.

How were CLOs able to avoid the distress experienced by so many seemingly similar sectors during the financial crisis? We highlight three factors that contributed to the success of CLO equity and that differentiated CLOs relative to other structured finance asset classes of this era:

  • Long-term funding: CLO equity tranches achieve leverage via long-term funding at fixed credit spreads. As a result, CLO managers were not forced to sell loan assets in the periods of deep market distress experienced during the GFC. By contrast, structures that relied on shorter term funding instruments (e.g., repo financing) faced margin calls and thus were forced to sell assets at distressed prices, eroding returns.

  • Benefits of senior-secured corporate lending: The business loans that back CLOs are senior in the issuers’ capital structures and are typically secured by real estate or other corporate assets. As a result, the recovery rates on loans have historically been much higher than for high yield corporate bonds, say, which are typically junior and unsecured. The high recovery rates on defaulted CLO loan assets in turn helped to limit the losses experienced by CLO equity and debt investors during the financial crisis period.

  • Industry diversification: CLO collateral pools are highly diversified across industry sectors. Most prospectuses limit the fraction of total pool balance that can be allocated to any one sector or obligor. By contrast, many other structured finance products were backed by highly similar assets (such as mezzanine subprime RMBS bond tranches in the case of CDOs)1, which all defaulted at the same time when US real estate prices declined and mortgage foreclosure rates rose.

We believe that the factors above which contributed to solid CLO equity returns during the financial crisis period continue to be broadly relevant going forward. While past performance is never a guarantee of future returns, the resilience shown by CLO equity through the historically extreme global financial crisis scenario helps contribute to confidence that the strategy can offer positive returns even if, as we expect, economic volatility remains elevated over the medium-term horizon.


1. “Collateral Damage: Sizing and Assessing the Subprime CDO Crisis”, Federal Reserve Bank of Philadelphia Working Paper No. 11-30/R.

Pretium, Progress Residential Outline Affordable Single-Family Rental Housing Strategy

PRESS RELEASE

Pretium, Progress Residential Augment Leadership Team for Affordable Single-Family Rental Housing Strategy

November 8, 2022

Former Goldman Sachs Urban Investment Group COO, Andrea Gift Allan, to Lead Pretium’s Affordable Housing Investment Portfolio Strategy, Innovation, and Execution

NEW YORK – November 8, 2022 – Pretium, a specialized investment firm with approximately $50 billion in assets under management, today announced, in a joint press release with Progress Residential, the next steps in its plans to increase access to affordable single family rental housing. Andrea Gift Allan has joined Pretium as Managing Director, Real Estate, to lead the firm’s affordable housing investments across the United States. In this role, Ms. Allan will partner with internal and external stakeholders to develop and manage Pretium’s affordable housing portfolio, in alignment with the firm’s key business and social impact goals. This will include serving as a strategic advisor to Progress Residential’s affordable housing team as they engage with residents, local housing authorities, and community partners to meet persistent and growing affordable housing demand in markets across the country.

Ms. Allan brings over 20 years of experience in asset and portfolio management, as well as expertise valuing and reporting on real estate investments and loans. She spent more than two decades at Goldman Sachs, where she most recently served as Managing Director and Chief Operating Officer of the Urban Investment Group within the Asset Management Division. In that role, she was responsible for developing and advancing the business’ strategy to deliver community impact and drive strong risk-adjusted returns, while meeting evolving regulatory requirements. She also oversaw a broad real assets portfolio, which included mixed-use, affordable and market rate multifamily, commercial and community facility real estate assets.

“Increasing quality, affordable housing supply across our markets is a business imperative,” said Don Mullen, Founder and CEO of Pretium. “Andrea’s decade plus of affordable housing investment experience will be an invaluable addition to the Pretium and Progress teams as we work with residents, investors, policymakers, lenders, developers, business leaders, and community organizations to achieve our ambitious goals.”

“Andrea has a successful track record of building business infrastructure across asset classes to drive both revenue and community impact, and we are excited to welcome a leader of her caliber to our team,” added Josh Pristaw, Co-Head of Real Estate at Pretium. “The residential housing landscape continues to grow and transform, and we look forward to benefiting from Andrea’s fresh perspectives and insights as we lead the way.”

“As affordability continues to play an integral role in today’s housing market, this is an opportune time to join Pretium, a market leader committed to developing solutions to our nation’s housing crisis,” said Andrea Gift Allan. “I am energized to be joining a team focused on innovating in this critical area, and I look forward to building upon the work Pretium and Progress have already done to further expand our affordable housing offerings.”

About Pretium

Pretium is a specialized investment firm focused on U.S. residential real estate, residential credit, and corporate credit. Pretium was founded in 2012 to capitalize on secular investment and lending opportunities arising as a result of structural changes, disruptions, and inefficiencies within the economy. Pretium has built an integrated analytical and operational ecosystem within the U.S. housing, residential credit, and corporate credit markets, and believes that its insight and experience within these markets create a strategic advantage over other investment managers. Pretium’s platform has approximately $50 billion of assets and employs more than 4,000 people across 30 offices, including Dubai, London, Seoul and Sydney. Please visit www.pretium.com for additional information.

 

June 2022

Pretium’s State of ESG Report

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