Dwight Shane Baldwin Silverleaf, with his insight and knowledge of the financial industry, has achieved significant success with SilverLeaf Financial his private equity firm, established in 2007. In the Solutions Program hosted by Harvard Law School, Baldwin enumerates the strategies that SilverLeaf Financial follows in order to take advantage of the financial crisis and ensure liquidity in the marketplace. He said, elaborating on his business model, “The reason we look to acquire first-position debt secured by income-producing commercial real estate is because if we wanted to take back a property, we would want an asset that has cash flow.” He added, “Our goal has never been the real estate, but to buy loans secured by commercial properties. However, we heavily underwrite the borrowers of these loans.”
He also emphasised the ‘structured sale’ platform undertaken as a joint venture with FDIC. As for the challenges faced by SilverLeaf Financial, Baldwin said that the biggest one was the generation of capital. He said, “One of the major challenges was being able to raise the capital needed to buy the loans. So we partnered with other private equity firms, investors and real estate organisations across the country to help us understand and evaluate the real estate in different markets.”
Baldwin said that his company purchases the loans at discounted values and goes back to the borrowers to offer them some type of discounted payoff. There are two key aspects to be considered when buying loans. “The first is to really understand the collateral and what the underlying collateral is worth and the second is to understand the borrower.” He posed the challenge that will hit the financial market in the next 3-5 years. He asked how people will find the financing to refinance $1.2 billion worth of commercial mortgage-backed loans that will come due in the next five years and how special services will deal with all their defaulted loans.
Replying to Polizzo’s query about why firms decide to invest through SilverLeaf, Baldwin replied that firms utilise the ability of SilveLeaf to analyse and understand debt as well as the opportunity to invest in partners through SilverLeaf. While the individual players allow the company discretion to make the decisions when going through a deal, the big institutional players are more involved in the process, requiring more control when choosing deals.
He also said that SilverLeaf Financial, after 321 residential loans, will not touch that particular market but will continue to dabble in every sphere of commercial market. He called them tough markets but with excellent pricings. Finally, he cautioned similar new ventures to be wary of the unknown even if a lot of underwriting is carried out.
About Shane Baldwin Silverleaf
Shane Baldwin is the founder and CEO of SilverLeaf Financial, a private equity firm, established in Salt Lake City, Utah, in 2007. With his experience of three years at Merrill Lynch as a financial adviser, Shane Baldwin gave birth to SilverLeaf Financial which has further expanded under his direction to include SilverLeaf Real Estate and SilverLeaf Asset Management. The firm purchases loans from FDIC trust and convert them to legal tender. The company also purchases foreclosures and associated collateral properties.
Shane Baldwin Silverleaf