Stephen Smith’s contrarian bid for Home Capital shows faith in housing markets
. In an interview at the time, the Oracle of Omaha said he took a 19.9-per-cent stake because he believed Home Capital could consistently make money serving clients who can’t get loans from banks, because there will always be “a lot of people don’t fit the cookie-cutter approach to borrowing that are perfectly decent credits.”
Mr. Smith’s timing is questionable, however, as the takeover comes when Canada’s housing market faces headwinds not seen in a generation, with mortgage rates soaring, home prices softening after a three-decade run and a recession looming. No one need warn the 71-year-old of the dangers that come with investing in housing. Mr. Smith filed for personal bankruptcy in 1984 when soaring interest rates torpedoed his first solo venture, a real estate development company. He talks openly about dealing with depression, and the lessons he learned.
A deft touch with data underlies all of Smith Financial’s holdings. Mr. Smith was into fintech before there was fintech, backing development of risk management software and working with insurers to create a secondary market for Canadian residential mortgages. While he said Monday he wants to buy Home Capital in part because of the strength of the management team, Mr. Smith will upgrade the business’ systems if he takes over.
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Home Capital — the mortgage lender bailed out by Buffett — is being bought by Smith FinancialThe $44-a-share offer from the company controlled by Canadian businessman Stephen Smith values Home Capital at $1.7 billion
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Smith Financial signs deal to buy Home Capital Group for $44 per share - BNN BloombergMortgage lender Home Capital Group Inc. has signed a deal to be acquired by Smith Financial Corp. that values the company at $1.7 billion.
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Home Capital to be acquired by Smith Financial in $1.7-billion dealSmith Financial will pay $44 in cash per share of Home Capital. Find out more.
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Home Capital to be acquired by Smith Financial in $1.7-billion dealSmith Financial will pay $44 in cash per share of Home Capital. Find out more.
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Home Capital to be acquired by Smith Financial in $1.7-billion dealSmith Financial will pay $44 in cash per share of Home Capital. Find out more.
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