Sreeni Prabhu, co-founder, Managing Partner, Co-CEO, and Group Chief Investment Officer, Angel Oak Capital Advisors, LLC (Angel Oak)

Unlocking financial value through alternative credit is a central theme in this engaging conversation with Sreeni Prabhu, co-founder, Managing Partner, Co-CEO, and Group Chief Investment Officer at Angel Oak Capital. With a keen focus on the structured credit space, Sreeni discusses how Angel Oak, one of the largest securitizers of non-qualified mortgages in the nation, skillfully navigates market dynamics to create strategic long-term value for investors. He highlights the current opportunity in mortgage-backed securities (MBS), as inflation stabilizes and interest rates are expected to decline, presenting a historic chance to enhance fixed-income allocations. Furthermore, Sreeni elaborates on the burgeoning second lien mortgage market, emphasizing the significant equity homeowners possess and the untapped potential for strategic financing solutions. Through this episode, listeners will gain insights into the evolving landscape of fixed income and the innovative approaches that Angel Oak employs to meet the needs of both institutional and individual investors.

Sreeni Prabhu, co-founder, Managing Partner, Co-CEO and Group Chief Investment Officer of Angel Oak Capital, shares his insights on alternative credit and the unique opportunities within the non-qualified mortgage sector during his conversation with ATLalts host and creator Andres Sandate. Beginning with his personal journey, Srinivas recounts his transition from a tennis player in India to a prominent figure in finance, highlighting the importance of networking, resilience, and a willingness to pursue an unconventional path. He emphasizes Angel Oak's strategic positioning as a leader in the mortgage-backed securities market, particularly in non-QM loans, and how the firm's comprehensive investment platform creates long-term value for its clients.

As the discussion progresses, Sreeni delves into the current economic landscape, noting the potential for fixed-income investments amid declining interest rates and controlled inflation. He points out that mortgage-backed securities are trading at historically attractive spreads, presenting a compelling case for investors. The conversation underscores the significance of education in the financial sector, with Sreeni advocating for transparency and trust-building between Angel Oak and its clients. This commitment to educating advisors and investors is a cornerstone of the firm's strategy.

The episode also explores the emerging second lien mortgage market, where homeowners can leverage their home equity for various financial needs. Sreeni highlights the substantial addressable market, estimated at $1.6 trillion, and discusses how Angel Oak is prepared to meet this demand with innovative financial products. As the episode concludes, Sreeni shares his vision for the future of Angel Oak Capital, emphasizing the need for a patient, long-term approach to investing in the ever-evolving financial landscape.

Takeaways:

• Sreeni Prabhu's journey from India to Milledgeville, GA to leading a $20 billion asset management firm is inspiring for anyone pursuing their professional and personal interests, regardless of industry or career.
• Angel Oak's unique position in the mortgage-backed securities market offers compelling investment opportunities.
• The firm emphasizes a long-term perspective, focusing on sustainable growth and risk management.
• Understanding the second lien mortgage market can provide valuable insights for financial advisors.
• Investing in non-qualified mortgages offers significant potential returns in the current economic climate.
• Angel Oak's commitment to education and transparency enhances relationships with investors and advisors.

Links referenced in this episode:

• angeloakcapital.com

Companies mentioned in this episode:

• Angel Oak Capital
• Angel Oak Mortgage REIT
• SunTrust Bank
• Washington Mutual
• Fannie Mae
• Freddie Mac