New York Firm Signs Agreement To Purchase Syndicator MMA
By Caitlin Jones
3 min read
Tax Credit Advisor, August 2009: JEN Partners, a New York-based private equity real estate firm, has entered into an agreement to acquire virtually all of the low-income housing tax credit (LIHTC) equity business of MMA Financial, a subsidiary of Municipal Mortgage & Equity, LLC (MuniMae).
The $31 million transaction, expected to close by year-end, will be financed by equity contributed by JEN Partners and by Real Estate Capital Partners (RECP), a New York real estate investment firm. MMA Financial will become a private company wholly owned by JEN Partners and RECP and be renamed Boston Financial Investment Management (BFIM).
Allen Anderson, a managing partner of JEN Partners, will be the chairman of BFIM; Kenneth Cutillo, chief executive officer. The firm’s headquarters will remain in Boston and most current employees of MMA Financial will be retained, Anderson said in an interview.
In addition to acquiring the operating business, JEN Partners will take over the assets of MMA Financial, including nearly all its existing LIHTC funds. MMA Financial aggregates, syndicates, and manages portfolios of federal state and housing tax credits. The firm has $8.3 billion of equity under management and manages approximately 1,800 apartment properties containing about 180,000 units in 48 states, the District of Columbia, and Puerto Rico.
MMA, originally founded as Boston Financial, has been a major syndicator of LIHTCs, though in the past 18 months hasn’t done much new syndication.
Anderson said, “We’ve been interested in the low-income housing tax credit business for a while, and we became aware of the possibility of this transaction a little over a year ago.” He acknowledged the LIHTC equity market is in a tough period, but added, “We see opportunity in times like this…We think bringing fresh capital and new leadership to an industry in times like these can be good for all parties involved, and we think it can be a very attractive investment for us.”
Anderson said JEN Partners has three plans for the new company. One is to expand the asset management side of the business. A second is to “selectively take advantage of opportunities to raise new [LIHTC equity] funds and make appropriate investments as time and conditions warrant.” Third, he noted, “Because we will be building off of a fairly substantial asset management base and have very sophisticated IT systems, I think there are opportunities to expand even outside the low-income housing tax credit business. But that would be longer term.”
MMA Financial executive Bernie Husser said MMA has about 140 LIHTC funds it owns and operates that go back as far as the 1980s. Regarding future activity after the acquisition, he noted, “We definitely plan on being back as a low-income housing tax credit syndicator, with probably historics as well.”
