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Singapore: Former Blackstone Inc executive Kishore Moorjani has started a digital platform in Singapore selling pools of home loans to asset managers and financial firms seeking to bolster local currency fixed-income assets.
The company, known as LXA, is initially aiming to manage about US$250mil in mortgages, and plans to expand to other markets such as Hong Kong, South Korea and Taiwan over the next few years, Moorjani said.
The firm has US$10mil in seed money from backers including New Enterprise Associates Inc, Openspace Ventures Pte and Singapore Economic Development Board Investment.
The digital platform will source mortgages through intermediaries such as advisers and mortgage brokers, and charge insurance companies and other buyers a management fee in return.
Financial regulators have been bolstering reserve capital requirements for insurers to protect policyholders.
These moves make residential mortgages more attractive because they are generally safe, collateralised and in local the currency, said Moorjani, the chief executive officer of the new firm.
“The immense potential within the Asian private-credit landscape lies in offering high grade, secure, locally denominated investment avenues to the substantial reservoirs of insurance and pension capital across the region,” he said.
Moorjani left Blackstone as senior managing director in 2021 after establishing a network of contacts at insurance companies and mortgage lenders during his time at the US alternative asset manager.
Shawn Low, a former executive at US mortgage lender Better Home & Finance Holding Co, is also a founder and chief operating officer of the platform.
LXA hopes to grab a slice of Asia’s S$260bil mortgage market, betting that regulatory changes on asset allocation will prompt insurers and other pools of capital to boost their exposure to domestic currency, long-term assets to avoid excessive reliance on US dollar investments.
Traditional lenders in Asia typically hold mortgages on their balance sheets and don’t sell them to third-party investors through securitisation deals, leaving insurers and pension funds with little exposure to local-currency mortgage products.
LXA will create a channel for insurers, pension funds, sovereign funds and endowments to invest in these mortgages, Moorjani said. — Bloomberg
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