Front Yard Residential Corporation (NYSE:RESI) (RESI) has renegotiated its asset management agreement (AMA) with its external advisor, Altisource Asset Management Corporation (NYSE:AAMC) (AAMC), effective May 2019.
Duff & Phelps served as the exclusive financial advisor to the Special Committee of the Board of Directors of RESI, assisting the Special Committee in revising the terms of the AMA and negotiating the transaction with AAMC. Duff & Phelps also provided the Board of Directors with a fairness opinion in connection with the revised AMA.
About The Transaction
The revised AMA provides RESI with several important new provisions, including (a) decreasing management fees as a percentage of gross real estate assets as RESI grows to bring the company’s G&A in line with larger industry peers; (b) incentive fee limits and an aggregate fee cap to further keep G&A in line with the market; and (c) a termination for convenience option, providing RESI with potential flexibility with respect to its asset management platform. Overall, the revised fee structure clearly aligns interests between RESI and AAMC and improves RESI’s operating metrics.
About Front Yard Residential Corporation
Front Yard Residential Corporation is a real estate investment trust which invests in the U.S. real estate market. RESI is one of only three exchange-listed REITs that specialize in acquiring and managing single-family home properties.
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