Chimera to Buy Palisades in $30M Cash Deal

Chimera Investment Corporation has agreed to acquire Palisades Group, an alternative asset manager specializing in residential real estate credit, for $30 million in cash.

Chimera will also pay an additional potential earnout of up to $20 million over five years contingent upon achieving certain financial targets, with the option for Chimera to pay 50% of the earnout payments in shares.

The transaction is expected to close during the fourth quarter of 2024 and be accretive to Chimera’s earnings in 2025. Upon closing, Jack Macdowell, Jr., co-founder and CIO of Palisades, will become Chimera’s CIO.

“Complementing Chimera’s permanent equity capital, this transaction is expected to broaden our residential credit reach to include managing assets for third parties and raising and investing private capital,” said Phillip J. Kardis II, president and CEO of Chimera.

The transaction is meant to broaden Chimera’s market presence and diversify its revenue streams. The combined entity will oversee over $30 billion in real estate assets and loans. The acquisition is also projected to add thirty-six Palisades professionals to Chimera, enhancing the company’s operational and loan risk management skills.

Chimera Investment Corporation is a publicly traded REIT that invests in a variety of real estate assets, including mortgage loans and mortgage-backed securities.

Houlihan Lokey acted as the exclusive financial advisor to Chimera and Hunton Andrews Kurth LLP served as legal counsel to Chimera. Mayer Brown LLP served as legal counsel to Palisades Group.