Dallas, Texas 12/04/2013 (Financialstrend) – Annaly Capital Management, Inc. (NYSE:NLY) is a well-known name in the real estate related investment sector as it offers a vast portfolio of products and investment products for different investor groups. From mortgage to the more commonly used collateralized mortgage obligations, Annaly has had a good run. It also operates through a network of subsidiaries allowing it to meet the needs of several real estate requirements.
Subsidiaries management key to success
The range of services these subsidiaries offer include real estate services, financial services as well conventional real estate services. Through one of its subsidiaries called the RCap Securities, Annaly Capital Management, Inc. (NYSE:NLY) has invested in various instruments varying Federal Home Loan Bank (FHLB) as well as the mortgage-backed loans Freddie Mac and Fannie Mae.
The recent developments, following whistle-blowers within the home loan industry has led to much of the large profile companies- beginning with JP Morgan to a host of other companies coming under Justice Department investigations. Allegedly, the banks involved in the fraud had in-traded Freddie Mac and Fannie Mae leading to financial mess that could cost each of the banks billions.
Considering that the investigations and settlements so far have resulted in only the tip of the iceberg real estate investment industry does need to tread forward with caution.
The downturn of these issues, besides poor and lacklustre management within Annaly Capital Management, Inc. (NYSE:NLY) has resulted in investors losing faith. However, it has to be said, that it is not the only company but many others in this sector such as American Capital too has been trading at nearly 20% discounts of book value. The continued failure by the mortgage industry to attract bids combined with the rise in REITS yield too has had its affect. Besides, with a new favourite on board, Ellington Financial (EFC), because its management have been successful in maintaining book value