Key Takeaways
- • Sage Residential, founded by Mark Volosov and Damian Pasternak, has acquired approximately $180 billion in mortgage servicing rights unpaid principal balance (UPB) since launching in 2021, with a weighted average coupon of 3.8%.
- • The firm's strategy targets low-coupon mortgage servicing exposure acquired off-market, capitalizing on pandemic-era refinancing activity where borrowers locked in historically low rates, creating extended duration cash flows.
- • Volosov and Pasternak built the MSR investment capability at BlackRock between 2014 and 2021, scaling a portfolio to approximately $200 billion UPB before launching their independent platform with a team that has grown from 4 to 17 professionals.
- • Sage Residential's operating model emphasizes durable cash flows and hedged returns across varying interest rate regimes, leveraging proprietary sourcing channels and decades of sector relationships to acquire MSRs outside broader market competition.
Summary
Sage Residential represents a specialized investment platform focused on mortgage servicing rights, built by two veteran mortgage sector professionals who developed deep expertise at BlackRock over a seven-year period. Mark Volosov and Damian Pasternak partnered at BlackRock in 2014 to build a specialized MSR investment capability that ultimately reached approximately $200 billion in unpaid principal balance. An MSR represents the contractual right to collect fees for servicing mortgage pools—including collecting borrower payments and managing administrative tasks—throughout the life of the underlying mortgages.
The founders launched Sage Residential independently in 2021 after securing capital, initially operating with a four-person team that has since grown to 17 professionals across critical business functions. The timing of their launch coincided with a structural opportunity created by pandemic-era refinancing activity. As borrowers refinanced into historically low mortgage rates during 2020-2021, Volosov and Pasternak recognized that the MSR business generates value through duration—the longer borrowers remain in their homes and continue making payments, the greater the cash flow generated over time. This dynamic positioned low-coupon mortgage servicing exposure as a particularly attractive acquisition target.
To date, Sage Residential has acquired approximately $180 billion in MSR unpaid principal balance, primarily through off-market transactions that allowed the firm to operate outside of broader market competition. The portfolio carries a weighted average coupon of roughly 3.8%, reflecting the low-rate refinancing environment of the pandemic period. The firm's strategy explicitly targets durable cash flows and consistent hedged returns across different interest rate environments, leveraging proprietary sourcing channels and two decades of accumulated relationships within the residential mortgage sector to identify and acquire MSR assets before they reach conventional market channels.
The founders launched Sage Residential independently in 2021 after securing capital, initially operating with a four-person team that has since grown to 17 professionals across critical business functions. The timing of their launch coincided with a structural opportunity created by pandemic-era refinancing activity. As borrowers refinanced into historically low mortgage rates during 2020-2021, Volosov and Pasternak recognized that the MSR business generates value through duration—the longer borrowers remain in their homes and continue making payments, the greater the cash flow generated over time. This dynamic positioned low-coupon mortgage servicing exposure as a particularly attractive acquisition target.
To date, Sage Residential has acquired approximately $180 billion in MSR unpaid principal balance, primarily through off-market transactions that allowed the firm to operate outside of broader market competition. The portfolio carries a weighted average coupon of roughly 3.8%, reflecting the low-rate refinancing environment of the pandemic period. The firm's strategy explicitly targets durable cash flows and consistent hedged returns across different interest rate environments, leveraging proprietary sourcing channels and two decades of accumulated relationships within the residential mortgage sector to identify and acquire MSR assets before they reach conventional market channels.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.