00:00This is a property lender that's managed by Apollo Global selling its portfolio to an.
00:05Another part of Apollo, it's like an intra Apollo transaction, it's a commercial.
00:10It's a mortgage REIT, which is managed by Apollo and which is selling.
00:15Yeah, it's loan book to Athene holding, which is Apollo's insurance arm and which by.
00:20Another way is a is is in the capital stack of many of the commercial real estate loans that.
00:25That the mortgage REIT makes.
00:27Let's call the mortgage REIT RE.
00:29Okay, sounds good.
00:30Why is that?
00:31Why are they doing this?
00:32Well, Ari's been trading below.
00:35It's net asset value for four years and they came out and said effectively that they're
00:39frustrated.
00:40It's traded with that.
00:41It's trading at something like average of 77 cents.
00:45It's trading on the dollar.
00:46This is not, you know, an unheard of phenomenon in.
00:50Commercial real estate.
00:51I think recently, you know, the public markets have not valued.
00:55CRE very highly and, you know, as a result, you then say, well, what do we do?
01:00With this at the same time that stock market is saying, you know, we'll only give you 75 cents.
01:05On the dollar for this, you've got you've got private markets in this case.
01:10Athene that are really, really hungry for assets they can deploy capital into.
01:15And so, you know, you can see this as like a best of both worlds.
01:18Like we move.
01:20These loans out of the vehicle where they're undervalued and we put them in the place where
01:24there is.
01:25You know, a lot of capacity to deploy capital.
01:28Okay.
01:29So that leaves Ari with.
01:30Some room and it, you know, has some money to do stuff.
01:33What is it likely to do?
01:34How is it set up?
01:35No.
01:36Yeah.
01:37That's a great question.
01:38So it's like a billion for in net cash.
01:40And they've said they're going to look for new strategies and commercial real estate could be
01:44strategic.
01:45It's like M&A.
01:46Uh, the, and if they can't, if they can't find something they like and they.
01:50That, that, that will allow the stock to trade at book or above book.
01:53They'll look at dissolving the company, which I think.
01:55Cause I, to me that got my attention this morning.
01:57Like you don't often hear or we're thinking about why.
02:00I'm paying this thing down because the stock market doesn't like it.
02:03I mean, I think that the, you know.
02:05What recently have been the popular, uh, places are, you know.
02:10Certainly like data centers.
02:11I mean, is there a data center strategy here that would make sense?
02:14Certainly that's a.
02:15Is there a place where I think public markets would attribute, you know, fair value to.
02:20Right.
02:20Probably respond positively to.
02:21Exactly.
02:22So there's that.
02:23Um, you know, net lease has been hot.
02:25That's a little esoteric kind of, kind of credit like investments and in real estate.
02:29Um.
02:30The, you know, there are other smaller, uh, commercial mortgage reasons.
02:35The, you know, there are other smaller, uh, commercial mortgage reasons.
02:35Which could look like attractive acquisition targets going forward.
02:38The thing that what's the stock trading.
02:40The internet now when I checked earlier, it was like $10 and 60 cents or something like that.
02:45The, um, you know, in, in, in the release, uh, announcing this.
02:50Deal.
02:5110 63.
02:5210 63.
02:53So in the release announcing this deal, Ari said that.
02:55Between the net cash and some, uh, sort of legacy real estate assets that they own.
03:00That they took back from borrowers at one point or another.
03:03Uh, there's $12 and five.
03:05Uh, value for shareholders.
03:07So why is there that gap?
03:08Like what is it?
03:09The public market.
03:10It is still discounted.
03:11It.
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