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Sage Residential builds scalable mortgage servicing rights platform

The firm says it has acquired about $180 billion of MSR Unpaid Principal Balance with a weighted average coupon of roughly 3.8%.

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Sage Residential is building a scalable investment platform focused on mortgage servicing rights, aiming to generate durable cash flows across different interest rate environments, according to Hedgeweek.

The company was formed by founders Mark Volosov and Damian Pasternak, who previously worked together at Blackrock starting in 2014. They spent roughly two decades in the U.S. residential mortgage sector, and at Blackrock the MSR portfolio they managed reached about $200 billion of unpaid principal balance.

Hedgeweek reports that Sage secured capital in 2021 after COVID delayed the launch by about a year. The firm says it started with four people and has since expanded to a team of 17 across key business functions.

Sage says it invested through the pandemic by targeting low-coupon MSR exposure as borrowers refinanced into historically low mortgage rates. It adds that it has primarily purchased off-market, and out of broader-market competition, acquiring approximately $180 billion of MSR UPB with a weighted average interest rate around 3.8%, and that lower coupon exposure can reduce refinance risk for more persistent servicing fees.

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