Investcorp purchases stake in Marblegate which is known to have purchased Taxi Medallion loans


Published on 09/26/2021

Alternative investment manager Investcorp, which lists Abu Dhabi-based Mubadala Investment Company as its largest shareholder, has acquired a minority stake in mid-market special situation credit specialist Marblegate Asset Management LLC. The fund manager focuses on troubled assets. The deal would benefit Marblegate by providing access to Mubadala’s balance sheet, as well as to the Investcorp platform. Investcorp will be a passive non-voting partner and the Marblegate team, made up of co-founders Paul Arrouet, Managing Partner, and Andrew Milgram, Managing Partner and Chief Investment Officer, will remain intact. Marblegate currently has nearly $ 3 billion in assets under management.

Marblegate Asset Management is New York City’s largest taxi-medallion loan holder. Taxi medallions were once worth over $ 1 million, but their value plummeted when ridesharing apps like Uber Technologies and Lyft proliferated in major US cities. The asset manager had granted approximately 2,000 locket-owner drivers a loan repayment holiday each month since mid-March 2020. At the end of 2019, the fund manager maintained measures to write down taxi locket loans in order to ease the debt burden of taxi drivers. Some industry experts estimate that Marblegate controls nearly a third of the city’s 13,500 taxi medallions.

On February 19, 2020, Marblegate Asset Management acquired 3,500 distressed medal loans at auction from the National Credit Union Administration, which took over the medallions of several bankrupt credit unions.

According to the NCUA press release in 2020, “NCUA’s holdings included medallion loans from Melrose Credit Union and LOMTO Federal Credit Union, which supported New York City’s taxi industry for nearly ‘a century until their liquidation in 2018. To date, the Share Insurance Fund has lost more than $ 750 million due to these and other credit union bankruptcies related to locket loans. taxi. 1

For nearly 18 months, the NCUA evaluated various approaches to solving this portfolio, including holding and servicing loans, bundling, structured selling, and securitization. After careful consideration, investor education and consultation with an independent financial advisor, the NCUA has determined that a single wholesale is the best option to meet its legal requirements and avoid unnecessary volatility in the medallion market. taxi already stressed.

The NCUA’s acting general counsel at the time said the loan amount and the exact number of loans sold to the hedge fund are exempt from US freedom of information law. Some news sources say the amount was around $ 350 million for the locket loans.

Before the NCUA deal, Marblegate owned around 300 taxi lockets and around 1,000 locket loans that they had purchased from Capital One Financial Corporation.

Keywords: Investcorp Holdings BSC.

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