Velocity Financial, a publicly traded real estate financing firm, has entered a definitive agreement to acquire the operating platform of Toorak Capital, a business-purpose lending and asset management platform majority owned by funds advised by affiliates of KKR. In a separate but related transaction, Toorak has agreed to sell its existing ~$3 billion business-purpose loan portfolio to an undisclosed third-party investment firm, with Velocity taking on management of that portfolio and entering agreements to sell future Toorak-originated loans to the buyer and other counterparties; the combined platform and portfolio deals are valued at roughly $3.2 billion. The main objective is to shift Velocity toward a capital-light, fee-based model built on origination, servicing, and asset management, while expanding its residential transition loan and DSCR product lines, adding a direct retail origination channel, and extending its footprint into the UK, where Toorak also operates; Velocity expects the deal to boost origination volume by about 76% and its servicing portfolio by about 39%. Key players include Velocity co-founder and CEO Chris Farrar, who called the acquisition a way to deepen the company’s presence in “segments where we see durable, long-term demand,” and Toorak founder and CEO John Beacham, who will move into an executive vice president role at Velocity while Toorak retains its Tampa headquarters and existing brands.

Velocity Financial Acquires Toorak Capital’s Lending Platform in $3.2B Deal