NOVC Board should disclose the identities of Sr Debt holders & provide clarity on NOVC future plans.
NOVC Sr Debt Holders/investors in Taberna I & II 67% are Fortress & FBR who holds the balance via Kodiak CDOs. See the bottom links.
My research suggests Fortress standard operating practice is to invest under the cover of other investments see recent public investments of Fortress now SoftBank as;
1. OMF One Main traded symbol OMF but at first Fortress operate it symbol LEAF (FIG old symbol before Softbank acquired Fortress for less than half its original market cap 2007-2017. Note COB Wesley Edens is ex Blackrock/Lehman Bros and ex Goldman Sachs Head of Special Situations Peter Briger Head of Credit at Fortress walked with over one billion in cash after the loss of this market cap). Fortress adopted the One Main name and symbol OMF after Fortress aka LEAF acquired One Main. LEAF was AIG Subprime (cars & personal loans) business and operated under the public symbol LEAF which was changed when they were allowed to buy Citibank's same unit One Main to be acquired for over $4B. Did Peter Briger past experience at Goldman Sachs help secure AIG subprime business called LEAF? Facts suggest ex Goldman Sachs CEO Hank Paulson Sec’y of US Treasury allowed or forced AIG to basically be nationalized handing Goldman Sachs 100% of their $12B counterparty risk on CDOs that Goldman Sachs bought from AIG (that is a different story). Fortress sold their 40% interest in OMF to Apollo Global Mgt for $1.4B
2. NST NationStar NST sold to KKR 17% owned Mr. Cooper COOP aka Washington Mutual WAMU for $3.8B. Per SEC docs Fortress owned 68% of NST and took est $700M cash off the table upon sale NST to COOP.
I can say we confidence a high ranking Director at Barings (introduced to me by Thomas Finke, CEO and CIO of Barings and Mass Mutual Officer) told me they were very committed to duplicate at NOVC, KKR transaction in COOP and had consulted KKR famed law firm Simpson Thatcher Bartlett and PJT Partners trades PJT/NYSE. PJT is ex Blackstone and trades at over billion-dollar market cap. This was about 2 years ago and since all NOVC Shareholders have seen is stealth and NOVC Board enrich themselves with awards of millions in RSUs and probably buying shares at pennies.
3. IMH Fortress use to own 25% of IMH Impac Mortgage Holdings https://finance.yahoo.com/quote/IMH?ltr=1 and today largest shareholder and Board Member at both NOVC, DX & IMH is Thomas Akin & his HF Talkot Capital (Mr. Akin is ex COB of DX and sat on DX board for years with Barry Igdaloff, Lead Board Member at NOVC as defined by Sarbanes Oxley Act SOX.)
4. DX Dynex Capital (recently joined NYSE) NOVC Founders worked here prior to founding NOVC aka NFI. Fortress owned 100% of Capstead Mortgage CMO which owned DX Dynex Capital. DX major shareholders happen to be NOVC Board Members Barry Igdaloff and Howard Amster. BI still sits on DX Board. Thomas Akin and his HF Talkot Capital are major investors in IMH, NOVC, DX. If you are shareholder in NOVC you need to study IMH (pps has almost double over last few weeks). Thomas Akin IMHO is very close to those controlling NOVC. I know he has advised Mass Mutual Barings. Also check the chart out on DX from 2000-2003 when CMO was invested. Fortress sold 100% of CMO in 2003 after DX price went from pennies to 7. DX then went to 10. No doubt NOVC Shareholders that all happened to hold or own over 25% of all NOVC prior to 31M common award to Sr Debt Holders owned massive DX positions and served on the DX Board. DX is where NOVC Founders Scott Hartman and Lance Anderson worked prior to founding NOVC then called NovaStar Financial Inc. traded NFI traded over NYSE under MREIT exemption, produced over $40B in Subprime Mortgage now called Non-QM mortgages per IMH which per public shareholder calls and SEC filings securitized two deals in 2018 100% collateralized by Non-QM mortgages both deals garnered AAA ratings from S&P and both were oversubscribed. I can render a guess that those loans are not as profitable or seasoned as those NOVC holds cleanup call rights to exercise on most of $3B portfolio under Service Rights Transfer Agreement section 5.04 see back of Q3 2007 NOVC 10Q. This high ranking Barings executive told me NIMs net interest margins of at least 200 Bpts make resecuritizing these collateral assets economical. Study Prospectus, Trust Agreements, Pooling Service Agreements PSA (documents willfully detached from Bond Remittance reports per VP at BNY Mellon Custodian for some of 26 deals in NOVC $3 B portfolio.
5. NCT Newcastle Investment Group MREIT which spun off NRZ New Residential Investment Group tax exempt MREIT trades today est 15 pps (read NRZ home page it clearly states NRZ is externally managed by Fortress). Listen to public conference call at NCT when it converted into Drive Shack symbol DS. COB of NCT was also Fortress COB Wesley Edens who explained why Fortress aka NCT conversion into DS would use or monetize 100% of NCT's NOLs at Drive Shack DS (Top Golf knock off).
NOVC Board I would suggest must disclose the identity of Sr Debt Holders, who control the CDOs and who have received windfall benefits? Taberna I & II is held and controlled by Fortress and holds 67% of NOVC Sr Debt. Joel Sher Partner at Shapiro Sher knows. NOVC Board comprised of DX investors Barry Igdaloff, Howard Amster (Barry Igdaloff’s past co investors and board members at DX include; Thomas Akin and BI college mate Todd Emoff who are both major investors in DX and NOVC, read Barry Igdaloff own book “Guest in Nightmare” his story of investing in Guest Supply. He references Mr. Todd Emoff/Freedom Asset Management many times. Is it odd that these investors all connected to Barry Igdaloff/Howard Amster also own the max equity in NOVC allowed by Poison Pill, possibly more) and 3 Board appointees of Chuck Gillman/Jeff Eberwein and another appointee of theirs Bob Pearse have given these investors Sr Debt Holders a massive windfall (first in Ch 11 $6.3M (5.8M all back interest compounded + undefined 500K penalty, plus conversion of unsecured to first lien on most NOVC balance sheet) and now days ago 31.250M common shares. Read 10Q for 2019 Q2 Sr Debt Holders now hold, 9M common shares + 22.250M warrants at less than 1 cent). IMHO reasonable investor should expect Fortress alone to make over $400m in NOVC common by duplicating their playbook at NCT Newcastle Investment Group. Note SEC docs show Fortress paid almost nothing for NOVC Sr Debt the same year 2010 that Barry Igdaloff and Howard Amster joined NOVC board.
Gillman & Igdaloff could make 200M each by following NCT strategy. The same legos are in place.
NOVC Shareholders deserve to know who NOVC Board has been negotiating with on the Sr Debt. The answer provides context to present status of NOVC and more important a logic road map to monetizing NOLs and finally building shareholder value. These investors Fortress, FBR, Mass Mutual hold over 50% add in DX investors and Chuck Gillman group and it is more like 60- 72% of NOVC equity. The Sr Debt pays a paltry rate and is nothing without a real plan to monetize NOLs and build shareholder value. NOVC Board owes transparency on who has benefited from windfalls given Sr Debt Holder Investors by NOVC Board. My research is clear Fortress controls Taberna I and II that hold 67% of NOVC Sr Debt and longtime REIT bank FBR holds 33% via Kodiak CDOs, read exhibit 10.1 of last 10Q Q2 2019.
Given the tremendous experience (MREIT, Cleanup Call Rights, MBS, and hedging of these assets) of Sr Debt Holders and the NOVC Board members NOVC Shareholders must ask why has no reasonable plan to monetize NOVC NOLs/Unrealized Tax Capital Losses $730M been announced? Why has NOVC Board awarded themselves massive RSU valued at pennies when they should serve the board only to improve NOVC shareholder value? Why is NOVC Board breaching SOX by allowing 3 Directors; Pointer, Eriksen and Keddie to serve without investing one dollar in common equity. These 3 have long & close relationships to Jeff Eberwein, ex COB of NOVC, now COB/CEO of Hudson RPO symbol HSON and Chuck Gillman BRK pal of Whitney Tilson. FACT 2014 Whitney Tilson, Kase Capital introduced Mr. Gillman to NOVC shareholder they introduced Mr. Gillman to Mr. Barry Igdaloff Nov 2014, the rest is all on them as they represented themselves as excellent fiduciaries of shareholder capital.
A reasonable person/investor after doing a little homework should ask NOVC Board why doesn't NOVC duplicate Fortress' playbook at Newcastle Inv Group NCT which took one public co and created two one tax exempt MREIT and the other holding all of their NOLs/Unrealized Capital Tax losses per last 10Q? NovaStar Financial Inc. NFI one of the leading MREIT brands prior to 2007/08 Financial Meltdown could be managed by Fortress just like Fortress manages NRZ see NRZ home page. NOVC Shareholders have spent over a decade and over $10M to save NOVC, NOLs and NovaStar Financial Inc. NFI brand which holds Cleanup Call Rights on most of $3B Portfolio of Non-QM mortgage loans. NOVC Board owes Shareholders transparency on their plan, in fact my recommendation is a new slate of Directors be proposed as this expectation is long overdue.
Cohen Sells $6.8 Billion of CDO Rights to Fortress - Bloomberg
https://www.bloomberg.com › news › articles › cohen-co-sells-6-8-billion-...
Jul 30, 2010 - Cohen & Co., the Philadelphia firm that built itself into the second-largest manager of collateralized debt obligations, is selling its contracts to ...
Fitch: Asset Mgr Transfer to Fortress Affiliate Will Not Impact ...
https://www.businesswire.com › news › home › Fitch-Asset-Mgr-Transfer-...
RAIT Trust transfers Taberna rights to Fortress Investment ...
Whitney Tilson Done With Hertz, Pitches AutoSlash.com
POSTED BY: SHEERAZ RAZA FEBRUARY 10, 2017
Whitney Tilson’s email discussing Munger meeting this coming Wed in LA; happy hour after; Becoming Buffett; A Quiet Giant of Investing Weighs In on Trump; Dan Loeb: Trump will make hedge funds great again; P/S of S&P 500; Inside Sears’ death spiral; Autoslash.com.
Also Tilson Family Happy With Hertz After Doing ‘Channel Checks’… –
Whitney Tilson – Munger Meeting
1) The Wesco annual meeting was always a must-attend for hard-core value junkies because it was an opportunity to hear Charlie Munger, a genius in his own right, answering questions for ~3 hours in a much smaller setting than the Berkshire meeting (where Buffett did most of the talking anyway) (my notes from the 1999-2007 Wesco annual meetings are posted here: www.tilsonfunds.com/motley_berkshire_wescomeetings.php).
Chuck Gillman joins the NOVC board
Chuck Gillman joins the NOVC board picks up 95k est Stock Grants. He is and was behind Jeff Eberwein and does nothing by chance. He is Whitney Tilson's WT small cap ring leader (Kase Capital x T2 Partners).
Whitney Tilson: Warren Buffett’s ‘Ringmaster’ Turns Grand Ideas Into Reality
By VW Staff on April 28, 2015 11:35 am in Stocks
Whitney Tilson on the events in Omaha; Warren Buffett’s ‘ringmaster’ turns grand ideas into reality; Oriental Trading; Curtis Macnguyen is a former hedge fund star
Per Whitney Tilson: Berkshire Hathaway annual meeting
1) On Friday I’m flying to Omaha to attend my 17th consecutive Berkshire Hathaway annual meeting. I’m especially looking forward to it this year for two reasons: first, it’s the 50th anniversary of the year Buffett took control of Berkshire, so the carnival should be bigger than ever; and second, it’s the first time one of my children is attending (my oldest of three daughters, a 19-year-old college freshman, is flying in from Minneapolis).
If you’re going to be there as well, I’d like to invite you to three events on Friday evening, Saturday afternoon, and Sunday morning, all in the St. Nicholas Room at the Omaha Hilton:
1) My friend Chuck Gillman and I are hosting our annual cocktail party from 8pm-midnight on Friday, May 1st. No agenda, no speeches, no dress code – just come, enjoy the drinks and snacks, and meet other value investors.
2) Chuck and I are also hosting a casual get-together immediately following the annual meeting on Saturday, May 2nd – just walk across the street or take the skybridge to the Hilton. It will end around 6pm.
Berkshire Hathaway 2016 AGM
Posted on April 14, 2016 by Brian Langis
*Updated April 20th.
I will be in Omaha for the 2016 BRK AGM. I will be there from Friday April 29th to Sunday May 1st. I’m planning to leave not to long after the Markel Corp. meeting. If anybody wants to meet up, I will be at some of these events:
Friday, April 29:
· Noon-3pm: Berkshire Exhibition Hall visiting companies.
· 3pm: Value Investing Panel at Creighton University
· 5pm: Yellow BRKers get together
· Columbia University “From Graham to Buffett & Beyond” dinner????
· 8pm: Whitney Tilson’s cocktail party
Saturday, April 30:
· 8am-4pm BRK AGM. I’m watching a 85 and 92 year old take questions for hours.
· 4pm – YPO has an event with Tom Gayner (Markel), Tom Russo from Gardner Russo & Gardner, and and Tim Vick, author of How to Pick Stocks Like Warren Buffett. Not sure if I will go because I’m not a YPO member.
· Another event by Whitney Tilson and his friend Chuck Gillman. Whitney won’t be there. It’s a casual get-together immediately following the annual meeting.
· 5:30pm: I might attend the Nebraska Furniture Mart Cookout. It was a lot of fun last despite the long line to get in. Music, BBQ and Budweisers. BTW Nebraska Furniture Mart which is the largest furniture shop in the US.