South Street Capital Management History

South street capital management
“SSCM” is a capital manager specializing in residential mortgage and other real estate related investments. SSCM was formed in 2018 as a partnership between Atlantic Capital Advisors(“AC Advisors”) and South Street Holdings who had been strategic partners for 10+ years.AC Advisors had a long history of mortgage investing and mortgage banking. The management team at AC Advisors founded a privately held REIT in 1998, which remained its sole management duty until 2007 when they formed Hatteras Financial, which they took public in 2008. Original investment focus was in adjustable-rate and hybrid adjustable rate residential Mortgage Backed Securities (MBS). The strategy expanded from strictly ARMs to include agency fixed rate MBS, the creation of a whole loan conduit in 2013 and the purchase of an Mortgage Servicing Rrights (MSR) manager in 2015. Hatteras Financial was acquired in 2016 but continued to manage the original privately held REIT until 2018 which is now under the management of SSCM.South Street Securities Holdings Inc., through its wholly owned subsidiaries, is a leading provider of U.S. Treasury and Agency repo financing to Agency Mortgage REITs, asset managers, banks, broker-dealers and other capital market participants. South Street is a leading provider of MBS repo financing to the Agency REIT sector by acting as a credit intermediary between the Agency REITS and high-quality liquidity providers in the repo space. South Street’s mortgage business provides access to the capital markets for mortgage originators that hedge their forward pipeline exposure. South Street also provides other servicing, collateral management, technology, and administrative services for banks, broker-dealers and other capital market participants.

South Street Capital Management

For the last 20 years our management model appealed to investors in search of investment stability and consistent income. We seek to provide a diversification tool which will generate a more attractive risk-adjusted rate of return than traditional fixed-income alternatives. We specialize in residential mortgages with a deep knowledge of publicly traded mortgage related companies.

Our long history has allowed us to build strong relationships with non-bank mortgage originators, major commercial banks, leading investment banks, law firms and other asset managers. Management has extensive experience in Capital Markets, Fixed Income Sales and Trading, Asset/Liability Management and Mortgage Banking. Our experience also comprises multiple housing cycles and interest rate environments.

Investors benefit from our experience managing a public company. Procedures and controls reflect the policies of a publicly traded investment company along with having an independent board of directors, preference to use nationally recognized accounting firms as auditors, and use of major commercial banks for functions such as securities custodian.

SSCM’s Strategic Partnerships provide access to:
  • Wholesale funding markets
  • Liability franchise that provides a consistent source of funding, especially during times of market stress
  • Mortgage trading platform allows for direct access to mortgage originators, enabling SSCM to buy MBS on the ‘bid side’ of the market
Strategy Highlights

  • Capture the historically positive spread relationship between the yields on short-duration Agency MBS and short-term financing rates
  • Use both equity and borrowed funds to generate income from the interest on assets less borrowing and hedging cost
  • Investing in highly liquid and in most cases government guaranteed assets
  • Continuous adjustment of risk vs reward profile by modifying the portfolio leverage based on macroeconomic conditions.
Manager Objectives
  • Achieve durable risk adjusted returns over various interest rate, housing and economic cycles
  • Identify and capitalize on relative value of discrepancies in the RMBS markets
  • Actively manage cash flows to provide for opportunistic investing and regular distributions to our Clients
  • Maximize tax efficiency
  • Minimize credit risk
  • Mitigate the impact that changing interest rates have on the portfolio by utilizing dynamic hedging strategies
  • Offer uncorrelated returns vs. other asset classes

Meet the Team

“Management has extensive experience in Capital Markets, Fixed Income Sales and Trading, Asset/Liability Management and Mortgage Banking. Our experience also comprises multiple housing cycles and interest rate environments.”

Benjamin M. Hough

CEO and President

Brian Snyder

CIO

Ben Watson

Analyst / Assistant Portfolio Manager

Dewey Johnson

Head of Operations

Gina Howard

Controller

Ken Lard

Chief Compliance Officer
“Management has extensive experience in Capital Markets, Fixed Income Sales and Trading, Asset/Liability Management and Mortgage Banking. Our experience also comprises multiple housing cycles and interest rate environments.”