Oak Circle Capital Partners LLC
We are externally managed and advised by Oak Circle Capital Partners LLC, a specialized asset management firm established in March 2012 for the sole purpose of providing management services to us. These services are provided to us pursuant to the terms of a management agreement between us and Oak Circle, under which Oak Circle implements our business strategy, performs investment advisory services and is responsible for performing all of our day-to-day operations. Oak Circle is at all times subject to the oversight and supervision of our board of directors.
All of our officers are employees of Oak Circle, and we do not have any employees, nor do we pay any of our officers any cash compensation. Instead, we pay Oak Circle a 1.5% annual base management fee and reimburse expenses directly related to our business and therefore reimbursable under the management agreement. In return, Oak Circle provides us with our management team, including our officers, and appropriate administrative and support personnel. We do not pay any incentive-based fees or equivalent compensation to Oak Circle.
Our investment approach, which benefits from Oak Circle’s disciplined cross-sectoral analytical methodology, focuses on selectively constructing and actively managing a diversified portfolio of RMBS and other mortgage investments that are designed to produce attractive risk-adjusted returns in a variety of market conditions. A top-down assessment of relative value across different market segments is combined with specific security selection designed to identify RMBS investments that are likely to perform well if security characteristics outperform expectations, but also likely to limit downside volatility if performance trends are below expectations. We select our RMBS investments based on a range of factors including extensive analysis of the underlying loans, in particular prepayment trends, average remaining life, amortization schedules, fixed versus floating interest rates, geographic concentration, property type, loan-to-value ratios and credit scores. The multi-trillion dollar size of the U.S. RMBS market enables us to be selective with our investments and target only the securities we deem to be the most attractive.