Altisource Portfolio Solutions S.a. · NASDAQ:ASPS
Altisource Portfolio Solutions — Investor Day (December 2013)
21 slides from Altisource Portfolio Solutions's investor day presentation, Dec 3, 2013
Slide 1: Investor Day Presentation December 3-4, 2013
Investor Day Presentation December 3-4, 2013
Slide 2: Forward-Looking Statements
Forward-Looking Statements 1 This presentation contains certain forward-looking statements that are made pursuant to the safe harbor provisions of the federal securities laws. These forward-looking statements may be identified by a reference to a future period or by the use of forward-looking termin
Slide 3: Investment Philosophy
Investment Philosophy Leverage core operating principles to create sustainable competitive advantage Identify secular trends Identify markets that are aligned with secular trends and core operating principles 2
Slide 4: Agenda: Core Operating Principles, Secular Trends, Strategic Allies
1. Core Operating Principles 2. Secular Trends 3. Strategic Allies Positioned for New Landscape Agenda 3
Slide 5: Core Operating Principles
Match funded and duration matched borrowing profile Sell down Prime MSRs to eliminate pre payment risk Core Operating Principles 4 Efficient Tax Structure 4 Capture Adjacent Revenue Altisource was established to capture revenue which was difficult to keep within Ocwen RESI capitalized on increased d
Slide 6: Lower Cost of Capital/Accretion Model
Lower Cost of Capital/Accretion Model 5 Accretion is most powerful for companies that have the following characteristics A. Target asset class is very large and offers returns well in excess of the anticipated dividend clearing yield B. Stable cash flows with long duration Ability to issue accretive
Slide 7: Creation of Strategic Allies
Creation of Strategic Allies 6 Positive Effects of Creating Strategic Allies Outweigh Negative Effects Pros Transparent cash flows that meet the needs of specific investor groups Capture revenue that might not otherwise be retained Focused management incentives Lower taxes Cons Increased costs assoc
Slide 8: Strategic Allies Sound Corporate Governance
Strategic Allies Sound Corporate Governance 7 Sound Corporate Governance with separate Boards and separate management Robust Related Party Transaction Approval Policies Transparency in inter company relationships through public company disclosures Strategic Allies have sound Corporate Governance
Slide 9: Agenda: Core Operating Principles, Secular Trends, Strategic Allies
1. Core Operating Principles 2. Secular Trends 3. Strategic Allies Positioned for New Landscape Agenda 8
Slide 10: Secular Trends
Government plans to reduce exposure to Mortgage Credit Risk Secular Trends 9 Secular Trends Reduction in population that can qualify as prime borrower Large banks narrow focus to core customers Leverage competitive advantages of Strategic Allies to create opportunities
Slide 11: Trend 1: Banks Narrow Focus to Core Customers
Trend 1: Banks Narrow Focus to Core Customers Banks Returning to Core Customers 10 Shift of MSR Portfolios from Banks to Specialty Servicers Reducing Exposure to Other Nonprime Lending Markets Repositioning Mortgage Origination 1. Goldman Sachs More than $500 billion of servicing UPB transacted in t
Slide 12: Trend 2: Decline of Prime Market Qualified Mortgage
Trend 2: Decline of Prime Market Qualified Mortgage 11 Credit supply to US consumers is restricted due to Tighter underwriting standards and Declining credit worthiness of borrowers Newly enacted Qualified Mortgage (QM) rules expected to severely limit mortgage availability According to Core Logic,
Slide 13: Trend 3: Government Reducing Exposure to Mortgage Domain
Trend 3: Government Reducing Exposure to Mortgage Domain 12 1. Credit Suisse 2. Based on a $200,000 loan 3. FHFA, July 16, 2013 Congress is considering legislation to reduce role of FHA, Fannie Mae and Freddie Mac (currently has bipartisan support) FHA has instituted significant price increases in r
Slide 14: Agenda: Core Operating Principles, Secular Trends, Strategic Allies
1. Core Operating Principles 2. Secular Trends 3. Strategic Allies Positioned for New Landscape Agenda 13
Slide 15: Altisource Residential (RESI) Vision
Altisource Residential (RESI) 14 Vision Capture growing demand for single family rental housing by purchasing Non Performing Loans Strategy Buy property cheaper than competitors through purchase of Non Performing Loans Operate property less expensively than competition with contracts from Strategic
Slide 16: Altisource Asset Management (AAMC) Vision
Altisource Asset Management (AAMC) 15 Vision •Multi Strategy Asset Manager, relying on core operating infrastructure of Strategic Allies to develop competitive advantage •Manage asset management vehicles focused on large and scalable asset class Strategy •Provide asset management services to RESI an
Slide 17: Home Loan Servicing Solutions (HLSS) Vision
Home Loan Servicing Solutions (HLSS) 16 Vision •Leading source of financing for mortgage assets with low credit and valuation risk •Growing business with a positive alpha and visibility to reinvestment Strategy •Replenish non-agency assets by purchasing similar assets from Ocwen •Establish Cayman Is
Slide 18: Altisource Portfolio Solutions (ASPS) Vision
Altisource Portfolio Solutions (ASPS) 17 Vision •To be the premier real estate and mortgage marketplace offering both content and distribution to marketplace participants Strategy •Expand Hubzu® to other institutions and the non-distressed home sale market •Grow origination related services through
Slide 19: Ocwen Financial Corporation (OCN) Vision
Ocwen Financial Corporation (OCN) 18 Vision •Leading provider of servicing and lending for loan investors and consumers Strategy •Focus on acquiring servicing UPB - $one trillion of servicing UPB estimated to transact in next few years •Develop Mortgage Origination business particularly in non-agenc
Slide 20: Ocwen Financial Corporation (OCN) Strategy
Ocwen Financial Corporation (OCN) 19 Strategy •Explore opportunities [organic or inorganic] in adjacent markets A.Insurance Domain •Evaluating opportunities within insurance domain which are more operationally intensive and have very low risk exposure •Insurance segments like Title Insurance and War
Slide 21: Competitive Advantage
Competitive Advantage 20 Identify Secular Trends and Leverage Core Operating Principles Altisource Asset Management LogoGovernment plans to reduce exposure to Mortgage Credit Risk Reduction in population that can qualify as prime borrower Large banks narrow focus to core customers Strategic Allies C
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