This might be a stupid question but can a mortgage investor that is not publicly traded and uses funds from investors & lenders be called private equity? This would be very similar to a private equity real estate firm; I just feel that private equity is an odd term in the mortgage industry.
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Quite a few companies do this. Anyone from large firms like KKR and Oaktree to small shops you've never heard of with family money.
So could a mortgage conduit be considered a private equity firm. Conduits do have investors and use debt as well in their funds. They also have a quick hold period for mortgages they place in a pool, securitize and sell to financial institutions.
No they wouldn't be considered a private equity firm because conduit loans will get pooled and securitized where it's sold publicly. PE firms will typically have a specific strategy in mind, raise the money, and then execute. In this case for the conduit loan execution is happening earlier, the terms of the deal are locked in at origination which is done by an investment bank, then it's sold to another bank who will pool it with other loans and securitize for sale in the public market. In the public market, your investors will still view it as a different kind of debt paying instrument, not equity.
I would say you still have some debt funds play in the CMBS space - particularly groups that are buying b pieces with fixed rate loan origination platforms (Starwood, Silverpeak, etc)
Private debt / credit. Private equity may be funding you, but you are private debt.
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