Dechert Advises Toorak and KKR on Velocity’s Agreement to Acquire Toorak's Operating Platform and Manage US$3 Billion Business-Purpose Loan Portfolio

Dechert advised Toorak and KKR on an agreement for Velocity Financial to acquire Toorak's operating platform. Toorak has also entered into separate agreements with a third-party investment firm for the purchase of Toorak's existing portfolio of business-purpose loans (BPL) totaling approximately US$3 billion in unpaid principal balance across whole loans and loans held in Toorak Mortgage Trust and TRK Trust securitizations.

In connection with the closing of the transactions, Velocity will also enter into an agreement with the third-party investment firm to manage the portfolio acquired from Toorak, as well as agreements to sell future Toorak loan production to the third-party investment firm and other counterparties. The total value of the platform and portfolio transactions is estimated at approximately US$3.2 billion.

Toorak Capital LLC ("Toorak") is a business-purpose lending and asset management platform which is majority owned by funds advised by affiliates of KKR, a leading global investment firm. Velocity is a vertically integrated real estate finance company that primarily originates and manages business-purpose loans secured by 1-4-unit residential rental and small commercial properties.

Corporate partners Ken Young and David Cosgrove led the Dechert team advising Toorak and KKR. The team included global finance partners Ralph Mazzeo, Linda Ann Bartosch and Richard Pugh, counsel Tom Caster, with associates David Peláez, Michael Beebe and Javier A. Pérez Rodríguez; corporate associates Ranjini Ramesh and Conor Shea; tax partners Will Cejudo and David Passey with associate Josh Meyerson; employee benefits and executive compensation partners Howard Klein and Steven W. Rabitz with associate Michael Binko; cyber, privacy and AI partner Hilary Bonaccorsi; intellectual property partner Thomas Rayski; labor and employment partner Ian Downes; national security partner Hrishikesh Hari; and enforcement and investigations partner John Bedford.

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