Canadian real estate-focused private equity firm KingSett Capital has acquired shares in MCAN Mortgage Corp (TSX: MKP), an investor in residential mortgages and other assets with headquarters in Toronto. The investment represents around 7% of the outstanding common shares of the company. In connection with the deal, Scott Coates, managing director at KingSett, will be nominated to serve on MCAN’s board of directors. In 2013, KingSett and H&R Real Estate Investment Trust jointly bought Primaris Retail Real Estate Investment Trust for around $5 billion.
KingSett acquires stake in MCAN Mortgage Corporation
TORONTO, March 18, 2014 /CNW/ – KingSett Capital and MCAN Mortgage Corporation (“MCAN”) are pleased to announce that today the KingSett Canadian Real Estate Income Fund LP has acquired 1,403,999 common shares of MCAN. The shares represent approximately 7% of the outstanding common shares of MCAN and are being purchased strictly for investment purposes.
In connection with the acquisition, MCAN has indicated that Scott Coates, Managing Director, Mortgage Investments of KingSett Capital, will be nominated for election to serve on MCAN’s board of directors at the next annual general meeting of MCAN currently scheduled to be held on May 7, 2014.
William Jandrisits, President and CEO of MCAN, said, “We welcome KingSett, one of Canada’s most successful private equity investors in real estate, as a shareholder of MCAN and we look forward to Mr. Coates’ contribution to our board following his election at our upcoming annual general meeting. KingSett has been a strategic partner in the financing of many of our projects and we look forward to expanding our business opportunities with them.”
Jon Love, Managing Partner of KingSett Capital said, “We are pleased to add this strategic investment to our core strategy Income Fund and look forward to the opportunity to work with MCAN to help grow our respective businesses”.
KingSett Capital is Canada’s leading private equity real estate investment business co-investing with pension fund and high net worth individual clients. KingSett Capital invests through a series of growth funds, mortgage funds and a core strategy income fund, each with its own risk/return strategy. KingSett Capital has over $5 Billion of assets under management.
KingSett Canadian Real Estate Income Fund is a long-term, private equity real estate fund that invests in a diversified portfolio of high quality, core strategy real estate investments in Canada seeking premium risk weighted returns.
MCAN is a public company listed on the Toronto Stock Exchange (“TSX”) under the symbol MKP and is a reporting issuer in all provinces and territories in Canada. MCAN qualifies as a mortgage investment corporation (“MIC”) under the Income Tax Act (Canada) (the “Tax Act”).
The Company’s primary objective is to generate a reliable stream of income by investing its corporate funds in a portfolio of mortgages (including single family residential, residential construction, non-residential construction and commercial loans), as well as other types of financial investments, loans and real estate investments. MCAN employs leverage by issuing term deposits eligible for Canada Deposit Insurance Corporation (“CDIC”) deposit insurance up to a maximum of five times capital (on a non-consolidated tax basis) as permitted by the Tax Act. The term deposits are sourced through a network of independent financial agents. As a MIC, MCAN is entitled to deduct from income for tax purposes 100% of dividends, except for capital gains dividends, which are deducted at 50%. Such dividends are received by the shareholders as interest income and capital gains dividends, respectively.
MCAN’s wholly-owned subsidiary, Xceed, focuses on the origination and sale to third party mortgage aggregators of residential first-charge mortgage products across Canada. As such, Xceed operates primarily in one industry segment through its sales team and mortgage brokers.
MCAN also participates in the CMB program, the market MBS program, and other securitizations of insured mortgages.
A CAUTION ABOUT FORWARD-LOOKING INFORMATION AND STATEMENTS
This press release contains “forward-looking statements” within the meaning of applicable Canadian securities laws. The words “may,” “believe,” “will,” “anticipate,” “expect,” “planned,” “estimate,” “project,” “future,” and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. Such statements reflect management’s current beliefs and are based on information currently available to management. The forward-looking statements in this press release include, among others, statements and assumptions with respect to:
the current business environment and outlook;
possible or assumed future results;
ability to create shareholder value;
business goals and strategy;
the stability of home prices;
effect of challenging conditions on us;
factors affecting our competitive position within the housing markets;
sufficiency of our access to capital resources; and
the timing of the effect of interest rate changes on our cash flows.
Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause the actual results to differ materially from the anticipated future results expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to:
global market activity;
worldwide demand for and related impact on commodity prices;
changes in government and economic policy;
changes in general economic, real estate and other conditions;
changes in interest rates;
mortgage rate and availability changes;
adverse legislation or regulation;
confidence levels of consumers;
ability to raise capital on favourable terms;
our debt and leverage;
competitive conditions in the homebuilding industry, including product and pricing pressures;
ability to retain our executive officers and other employees;
relationships with our mortgage originators;
ability to realize anticipated benefits from the acquisition of Xceed; and
additional risks and uncertainties, many of which are beyond our control, referred to in this press release and our other public filings with the applicable Canadian regulatory authorities.
Subject to applicable securities law requirements, we undertake no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in subsequent reports should be consulted.
SOURCE MCAN Mortgage Corporation
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