Counsel Corp. plans on disposing of its non-core businesses in order to concentrate on its financial services operations.
The Toronto-based money manager – whose core operating business is residential mortgage lender Street Capital Financial Corp. – said on Monday that its board has approved the move.
Street Capital accounted for about 80 per cent of Counsel’s revenues last year, Counsel said in a news release.
“Counsel’s board of directors explored a number of alternatives and has concluded that our plan provides the best option to unlock shareholder value,” Counsel chairman and chief executive officer Allan Silber said.
“It allows management to focus and build on the unique opportunity for growth and profitability provided by Street Capital while maximizing the value in our non-core operating business segments for the benefit of our shareholders.”
Counsel acquired Street Capital in May of 2011.
Last September, Street Capital said it would apply to become a federally regulated Schedule 1 bank, which would allow it to expand its offerings in consumer lending and related services.
In April, Street Capital said it was expanding into the near-prime mortgage business, a sector catering to customers who are unable to get a mortgage from traditional sources such as banks.
Counsel did not specify in its news release Monday what assets it wants to dispose of, but said it has been streamlining its operations, including monetizing almost all of its real estate assets and winding down its real estate management business.
“The decision to dispose of its remaining business segments accelerates this process,” Counsel said Monday.
One of Counsel’s main assets besides Street Capital is Counsel RB Capital LLC, which specializes in buying and selling distressed assets, including industrial equipment and real estate.
Last February, Counsel RB completed the acquisition of global auction and asset advisory firm Heritage Global Partners Inc.
On Monday, Mr. Silber said: “Street Capital is a significant growth platform for Counsel. Mortgage originations have increased by more than 60 per cent in 2012 compared to 2011, and our mortgage portfolio has more than doubled to over $12-billion since its acquisition, making Street Capital one of the leading non-bank lenders operating in the mortgage broker channel.”