Velocity Buys Toorak Platform
Velocity Financial Announces Agreement to Acquire Toorak Capital Platform for $3.2 Billion
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Key Points
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Toorak Capital LLC is majority owned by funds advised by affiliates of KKR, underscoring substantial private equity backing behind the platform.
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Since its inception, Toorak has funded over $20 billion in cumulative volume across about 43,000 loans, illustrating its scale in the BPL space.
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Toorak markets an AI-powered omnichannel asset sourcing capability that differentiates its business-purpose lending platform.
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A Back Book Acquisition by TOBI affiliates is part of the deal, with Velocity coordinating securitization-related activities under a master agreement with a TOBI affiliate (Titan RR) and arrangements around future loan production.
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Toorak will retain its existing brand and be led by its founder and CEO after closing, maintaining continuity in leadership and brand identity.
Velocity Financial will acquire the operating platform of Toorak Capital LLC for approximately $3.2 billion in an all-cash deal, significantly expanding its business-purpose lending business. HousingWire reported that Velocity will also manage a $3 billion loan portfolio that a separate investor is purchasing, creating a combined transaction that adds 280 employees and an AI-powered origination platform to Velocity's operations.
Toorak, backed by funds advised by affiliates of KKR, has funded over $20 billion across roughly 43,000 loans since inception, specializing in short-term rental property loans, debt service coverage loans, and ground-up construction lending. ConnectCRE noted that the deal is expected to close in the fourth quarter of 2026, pending regulatory approvals, with Toorak's brand and founder-led leadership remaining in place post-closing.
A Major Bet on Business-Purpose Lending
Velocity Financial is doubling down on business-purpose lending, a sector that finances single-family rentals, multifamily properties, and construction projects. By acquiring Toorak's operating platform, Velocity gains immediate scale with 280 employees and an established brand with a 20-year track record. CityBiz noted the deal creates a combined enterprise handling loan origination, asset management, and securitization across the United States and United Kingdom.
AI-Powered Origination and Fee Revenue Growth
Toorak's platform includes an AI-enhanced omnichannel sourcing capability that allows it to source loans across multiple channels and markets simultaneously. This technology differentiates Toorak from competitors and directly addresses Velocity's goal to diversify origination channels. Pulse2 reported that the acquisition will expand Velocity's fee-based revenue model tied to asset management and securitization activities, moving beyond traditional lending margins.
Managing a $3 Billion Loan Portfolio Under New Ownership
The transaction is structured in two parts: Velocity acquires Toorak's operating platform and teams for $3.2 billion, while a third-party investor purchases Toorak's existing $3 billion loan portfolio separately. Velocity will manage that portfolio and arrange ongoing loan production with the new owner, collecting management and securitization fees. ConnectCRE indicated this arrangement gives Velocity recurring fee revenue without capital risk tied to the existing loans.
KKR-Backed Platform Joins California Lender
Toorak is majority owned by funds advised by affiliates of KKR, one of the world's largest private equity firms. BayStreet reported that the sale represents a liquidity event for KKR's investment while allowing Toorak's founder and CEO to remain and lead the platform under Velocity's ownership. The deal closes the book on KKR's ownership while consolidating Toorak into a larger lending and asset management business.
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