@Hyun Supul, without diving too far into this, and the devil is always in the details, when I see this, I can't help but assume this whole offering is a way to for them to raise pref equity for their own deals, but wait, that won't look too good, so let's layer in some private credit, too.
It says it will lend money AND invest pref equity into MF deals owned by Disrupt and Open Door Capital.
Questions to ask: what allocation is going to loans versus pref equity in their own deals? Why do their deals need capital infused, and are those reasons due to poor management or things that were truly out of their control and/or could not have been foreseen at acquisition?
On the loans side, who is the lender JV? What is their book of business? Is this lender going to sending money back, as second mortgages to ODC/Disrupt deals?
@Chris Seveney, I can only imagine two things here:
1. They are lending to people who are so desperate they will pay 16+% for the loan. Which in itself gives me major pause, because these rescue capital loans almost never work out.
2. They aren't making money on the loans and the true business driver is the pref equity raise for their own deals. It allows them to keep those afloat and can collect fees on that side by retaining ownership of the deal.
