ABOUT THE FIRM
Who We Are
The Sculler group of companies includes a number of entities that together represent a self-funding investment firm. We structure investments, often using debt as the instrument, on behalf of private and institutional investors. Having access to and experience with private investors provides us with considerable flexibility in the options available for structuring an investment. Some of our institutional investors are among the largest pension funds in Canada. This group provides efficient long-term capital for assets at later stages of development or maturity. Sculler’s team is involved strategically at the operational level of any business or asset we invest in. The firm’s principals commonly invest alongside its investment partners.
Our Team
Sculler is an active investment firm. The Management team consists of seasoned finance, investment banking, engineering and legal professionals with over 80 years of combined experience. Direct transaction experience includes several billion dollars in commercial real estate, IPO and M&A transactions. The Sculler Group often takes a contrarian view of opportunities, and pursues projects against general market direction, realizing superior returns in difficult niches. Superior risk management and a focus on value creation have allowed Sculler to achieve very attractive rates of return for its investors since the firm’s inception.
SAMPLE INVESTMENTS
Mortgage Investments
In 2008, Sculler managed a group of funds that purchased Canadian securitized commercial real estate debt (CMBS) from US banks. These are issued certificates that represent the partial ownership of a pool of commercial mortgages. These assets are considered some of the most complicated debt instruments used to finance commercial real estate in existence today. At the time there was more than $14 Billion worth of such securities issued to fund commercial real estate loans in Canada. It is estimated that more than 75% of the securities issued at the time were reviewed by our firm.
The capital used was raised privately and the transactions were negotiated directly with US financial institutions. The majority of these assets have been sold for multiples of the purchased price; with some of the remaining assets still being managed to this day.
Investments in Commercial Mortgage Backed Securities (CMBS)
In a number of investments, CMBS certificates were purchased directly. This involved underwriting and reviewing, within a pool of mortgages that such securities belonged to, every individual mortgage’s collateral structure, collateral documentation and the specific characteristics of each real estate asset itself. It also required a thorough legal and risk assessment of the seniority each certificate had with respect to other certificates in the pool and all provisions for defaults and cost recovery rights available to each. The team exercised its certificate rights and managed the holdings until each investment was ultimately sold for multiples of its original cost.
Purchase of Direct Mortgages and B-Notes
B-Notes are pieces of commercial mortgages held outside of CMBS pools. They are often larger mortgages that have to be broken into pieces in order to reduce asset concentrations across a CMBS pool. Holding these loans requires the typical underwriting of the real estate asset, collateral structure and documentation as well as the rights provided to each piece of the mortgage purchased. These assets have successfully been paid out by the mortgagees.
Collateralized Debt Obligation (CDO)
Still being managed after its acquisition, is a former subsidiary of a US bank that had more than $250 million of CMBS assets. To date it is the only collateralized debt obligation issued in Canada. Currently, there is no individual investor who holds a larger capital position than Sculler’s in this specific investment. It continues to pay out with all private investors having received their capital investment and a considerable return to date.
Energy Infrastructure
Within the Sculler group is Sculler Energy Corp. Structured mortgage debt on real estate assets has many similarities with financing renewable energy assets. The ultimate objective of Sculler Energy Corp. is to bring the same disciplines required in mortgage syndication to capitalizing solar assets. The group’s strategy with these assets is to retain and manage them for the long-term in order to benefit from a stable business yield and has senior management engineering expertise to facilitate such. Across its solar investment funds, Sculler is one of the largest single investors.
Sculler Energy Corp
In 2009, Sculler became active in the solar energy industry in Ontario. Sculler created business relationships with a number of solar contracting firms. Its role was to function as a capital provider (investing with both debt and equity), developer and owner/operator of ground and roof-mounted solar projects in Ontario. Now, with more than 350 locations to date, the firm manages the largest number of microFIT projects owned by a single corporate entity in Ontario, and has developed an expertise in the funding, development and ownership of commercial-sized rooftop and ground-mounted solar projects. Through Sculler’s hands on approach, a working relationship has been developed with relevant government and most local distribution companies in Ontario.
For a number of years, Sculler Energy Corp. has been working in target areas of the United States to develop commercial solar projects. Efforts include the early stage investment in both grid-tied and net metered assets, acquisitions of grid-tied assets under development, the creation of US entities that can operate cross boarder in the most tax efficient manor, the sourcing of key personal and the creation of strategic relationships. Development of infrastructure assets can take up to five years before income is realized. In early stages, all of the investment capital has come from Sculler. Investment partners are brought in at the appropriate time when projects are considered to be de-risked to an appropriate threshold. There is a more fulsome description of our energy investments within Sculler Energy Corp.’s website.
