Cherry Hill Mortgage Investment Corporation Internalizes Management, Terminates Management Agreement and Concludes Strategic Alternatives Review Process
Cherry Hill Mortgage Investment (NYSE: CHMI) has transitioned to become a fully integrated, internally managed mortgage REIT, terminating its management agreement with Cherry Hill Mortgage Management, effective November 14, 2024. The internalization involves new employment arrangements with the senior management team and supporting personnel. No termination fee is required, and management fees will cease. The company expects this change to reduce expenses and enhance earnings. Additionally, the Board's special committee has concluded its strategic alternatives review, deciding to continue pursuing the company's residential mortgage investment strategy as an internally managed entity.
Cherry Hill Mortgage Investment (NYSE: CHMI) è passato a diventare un REIT ipotecario completamente integrato e gestito internamente, annullando il suo accordo di gestione con Cherry Hill Mortgage Management, con effetto dal 14 novembre 2024. L'internalizzazione prevede nuovi accordi di lavoro con il team di gestione senior e il personale di supporto. Non è richiesto alcun costo di risoluzione e le commissioni di gestione cesseranno. L'azienda prevede che questo cambiamento ridurrà le spese e migliorerà i guadagni. Inoltre, il comitato speciale del consiglio ha concluso la revisione delle alternative strategiche, decidendo di continuare a perseguire la strategia di investimento in mutui residenziali dell'azienda come entità gestita internamente.
Cherry Hill Mortgage Investment (NYSE: CHMI) ha pasado a convertirse en un REIT hipotecario completamente integrado y gestionado internamente, poniendo fin a su acuerdo de gestión con Cherry Hill Mortgage Management, efectivo a partir del 14 de noviembre de 2024. La internalización implica nuevos acuerdos de empleo con el equipo directivo senior y el personal de apoyo. No se requiere ninguna tarifa de terminación y cesarán las tarifas de gestión. La compañía espera que este cambio reduzca los gastos y mejore las ganancias. Además, el comité especial de la Junta ha concluido su revisión de alternativas estratégicas, decidiendo continuar persiguiendo la estrategia de inversión en hipotecas residenciales de la empresa como una entidad gestionada internamente.
체리 힐 모기지 투자 (NYSE: CHMI)는 완전 통합형 내부 관리 모기지 REIT로 전환하였으며, 체리 힐 모기지 관리와의 관리 계약을 2024년 11월 14일부로 종료합니다. 내부화는 고위 경영진 및 지원 인력과의 새로운 고용 계약을 포함합니다. 해지 수수료는 필요하지 않으며, 관리 수수료는 중단됩니다. 회사는 이 변화로 인해 비용이 줄어들고 수익이 향상될 것으로 기대합니다. 또한, 이사회 특별 위원회는 전략적 대안 검토를 완료하였으며, 회사의 주택 담보 투자 전략을 내부 관리 엔터티로 계속 추진하기로 결정했습니다.
Cherry Hill Mortgage Investment (NYSE: CHMI) a réalisé une transition pour devenir un REIT hypothécaire totalement intégré et géré en interne, mettant fin à son contrat de gestion avec Cherry Hill Mortgage Management, avec effet au 14 novembre 2024. L'internalisation implique de nouveaux contrats de travail avec l'équipe de direction senior et le personnel de soutien. Aucun frais de résiliation n'est requis, et les frais de gestion seront suspendus. La société s'attend à ce que ce changement réduise les dépenses et améliore les bénéfices. De plus, le comité spécial du conseil d'administration a conclu son examen des alternatives stratégiques, décidant de poursuivre la stratégie d'investissement en hypothèques résidentielles de l'entreprise en tant qu'entité gérée en interne.
Cherry Hill Mortgage Investment (NYSE: CHMI) hat den Übergang zu einem vollständig integrierten, intern verwalteten Immobilien-REIT vollzogen und den Managementvertrag mit Cherry Hill Mortgage Management mit Wirkung zum 14. November 2024 gekündigt. Die Internalisierung umfasst neue Beschäftigungsvereinbarungen mit dem oberen Management-Team und unterstützenden Mitarbeitern. Es ist keine Kündigungsgebühr erforderlich, und die Verwaltungsgebühren werden eingestellt. Das Unternehmen erwartet, dass sich diese Änderung positiv auf die Kosten auswirkt und die Erträge steigert. Darüber hinaus hat der Sonderausschuss des Vorstands seine Überprüfung strategischer Alternativen abgeschlossen und beschlossen, die Investitionsstrategie in Wohnhypotheken des Unternehmens als intern verwaltete Einheit weiterzuverfolgen.
- Elimination of external management fees expected to reduce operational expenses
- No termination fee required for management agreement conclusion
- Potential for enhanced earnings profile through internal management structure
- None.
Insights
This internalization move marks a significant strategic shift for Cherry Hill Mortgage Investment By eliminating external management fees and bringing operations in-house, the company is positioned to achieve meaningful cost reductions and improved operational efficiency. The absence of a termination fee is particularly noteworthy and financially beneficial.
The transition to internal management typically results in better alignment between management and shareholder interests, as compensation structures become more directly tied to company performance. For mortgage REITs, internal management can lead to enhanced earnings potential through reduced overhead and more streamlined decision-making processes. The Board's decision to maintain current investment strategy while implementing this structural change suggests confidence in the core business model.
The internalization decision, coupled with the conclusion of the strategic alternatives review, represents strong corporate governance practices. The process was overseen by a special committee of independent directors, providing important oversight and objectivity. The unanimous board approval and the transparent communication of the transition process demonstrate commitment to shareholder interests.
The absence of a termination fee in the management agreement dissolution is particularly shareholder-friendly, as such fees can often be substantial in similar transactions. The planned disclosure of detailed employment arrangements through an 8-K filing further reinforces transparency and accountability to stakeholders.
The management agreement was terminated upon the completion of an internalization event in which, among other things, the Company entered into employment arrangements with the Company’s senior management team and other personnel supporting the Company’s business. No termination fee is payable to the Manager, and the Company will not pay management fees to the Manager from and after the effective date of termination of the management agreement.
“We are very pleased to have completed the internalization process and begin our evolution as a fully integrated mortgage REIT,” said Jay Lown, President and CEO of Cherry Hill Mortgage Investment Corporation. “As an internally managed REIT moving forward, we expect to reduce expenses and enhance our earnings profile, thereby better aligning management and the investment community. I want to thank our team for all of their relentless work to complete the process.”
Additional details regarding the employment arrangements for the Company’s senior management, termination of the management agreement and related matters will be contained in a Current Report on Form 8-K to be filed by the Company with the
The Company also announced today that the special committee of the Board of Directors, which is comprised entirely of independent and disinterested directors, has concluded its previously announced review of strategic alternatives. Following a thorough review of strategic alternatives, the Board of Directors, based on the recommendation of the special committee, unanimously determined that it is in the best interests of the Company to continue to pursue management’s execution of the Company’s residential mortgage investment strategy as an internally managed company.
About Cherry Hill Mortgage Investment Corporation
Cherry Hill Mortgage Investment Corporation is a real estate finance company that acquires, invests in and manages residential mortgage assets in
Forward-Looking Statements
This communication contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time and are beyond our control. The Company does not assume any duty or obligation (and does not undertake) to update or supplement any forward-looking statements. Because forward-looking statements are, by their nature, to different degrees, uncertain and subject to numerous assumptions, risks and uncertainties, actual results or future events, circumstances or developments could differ, possibly materially, from those that the Company anticipated in its forward-looking statements, and future results and performance could differ materially from historical performance. No assurance can be given that the Company will realize the intended benefits of the internalization. Certain risks that may adversely impact the Company’s ability to realize the intended benefits of the internalization include: the inability to successfully retain the Company’s senior management team and other personnel supporting the Company’s business; unforeseen or higher than anticipated general and administrative expenses following the internalization; potential disruptions to the Company’s ordinary course operations, financing relationships and internal procedures; the diversion of management’s attention caused by the internalization and the process of transitioning from an externally managed to an internally managed company. Factors that could cause or contribute to such differences include, but are not limited to, those set forth in the section entitled “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and other reports filed by the Company with the SEC, copies of which are available on the SEC’s website, www.sec.gov.
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Investor Relations
(877) 870 –7005
InvestorRelations@CHMIreit.com
Source: Cherry Hill Mortgage Investment Corporation
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