Downside-first credit, resolved in-house.
VRB Capital acquires sub-performing and non-performing mortgage notes in the $0.5M–$10M+ UPB range, underwrites to current as-is collateral value, and resolves every position through active in-house asset management.
Three principles govern every acquisition
- Basis is protection. We never underwrite to a coupon we do not control. The only reliable protection is acquisition basis relative to verified collateral value.
- Model three exits, minimum. Every acquisition is stress-tested against no fewer than three resolution paths — modification, discounted payoff, and disposition. We acquire only when each modeled path supports principal recovery.
- Resolve in-house. Active borrower engagement and servicer oversight are not outsourced. Resolution is the work — and the source of alpha.
The process
01 · Sourcing
Direct relationships with banks, regional lenders, special servicers, and loan sale advisors. $400M+ annual screened flow; 50+ active seller relationships; under 5% of screened positions acquired.
02 · Underwriting
Two independent collateral valuations per deal (BPO + desktop appraisal). A minimum of three exit paths stress-tested. If the downside case does not return principal at acquisition basis, the deal is declined — the origin of the 0.0% realized loss rate.
03 · Resolution
Active management with monthly review. 15-month average hold on resolved positions; 100% of workouts executed in-house.
04 · Exit
Returns realized by closing the spread between acquisition basis and resolved collateral value. Since inception, VRB Capital has fully resolved 7 positions with a weighted average gross IRR of 25.8% and zero principal losses.
Frequently asked questions
How do non-performing loans generate returns?
Returns are generated by resolving the loan at a value higher than the acquisition basis — the difference between basis and recovered value, plus interim cash flow.
What is the typical hold period?
Hold periods average 12–18 months across the portfolio. The Fund is structured with a 5-year term and two 1-year extension options.
How does VRB Capital protect against principal loss?
Acquisition basis (typically 55–70% of UPB) and collateral verification (two independent valuations per position). A position must demonstrate principal recovery under downside stress before approval.
What regulatory framework governs the Fund?
Rule 506(b) of Regulation D. Offerings are made only to accredited investors with a pre-existing substantive relationship with the firm.
