Frank Libetti

Frank Libetti (KBW) questioned AdamasTrust's capital deployment strategy, balancing Constructive originations, agency deployment, and share repurchases, and asked if a preferred return threshold guides these allocations. He also inquired about competition in the business purpose lending channel, including new entrants and margin pressure, and requested an update on quarter-to-date book value.

Answer

Jason Serrano, CEO, stated that capital allocation targets mid-to-high teens risk-adjusted returns, emphasizing Constructive's capital-light model and flexibility. Nicholas Mah, President, added that efforts are focused on increasing Constructive's volume and efficiencies without immediate additional capital. Nicholas Mah also acknowledged the competitive BPL market but highlighted strong institutional demand and Constructive's top-tier position. He confirmed that adjusted book value was up 3-4% quarter-to-date.

Frank Libetti inquired about Adamas Trust's capital allocation strategy, balancing Constructive originations, Agency deployment, and share repurchases, and whether a preferred return threshold guides these decisions. He also asked about competition in the business purpose lending channel, including new entrants and margin pressure. Lastly, Libetti requested an update on the company's book value quarter-to-date.

Answer

Jason Serrano, CEO, stated the focus is on maximizing total return with mid-to-high teens risk-adjusted returns across capital deployment avenues. He noted Constructive is a capital-light model, providing flexibility, and capital allocation shifts based on market opportunities. Nicholas Mah, President, added that efforts are underway to increase Constructive's volume and efficiencies without requiring additional capital. Regarding competition in DSCR loans, Nicholas Mah acknowledged it's competitive with strong institutional buyer demand, but Constructive, as a top-tier player, is navigating it well. He also confirmed that adjusted book value is up 3-4% quarter-to-date.