Velocity Financial has entered into a definitive agreement to acquire the operating platform of Toorak Capital, a business-purpose lending and asset management business majority owned by funds advised by KKR affiliates.
Separately, Toorak has agreed to sell its existing business-purpose loan portfolio, representing approximately $3 billion in unpaid principal balance, to a third-party investment firm. Velocity is expected to manage that portfolio following closing.
The estimated total value of the platform and portfolio transactions is approximately $3.2 billion, based on Toorak’s consolidated balance sheet as of June 30, 2026.
Velocity will also enter agreements to sell future Toorak loan production to the third-party investment firm and other counterparties, supporting a more capital-light, fee-based operating model.
Since its founding in 2016, Toorak has funded more than $20 billion across nearly 43,000 loans. Its products include residential transition loans, ground-up construction loans and long-term DSCR rental property loans.
Velocity expects the transactions to be accretive to GAAP earnings in 2027, while increasing its origination platform scale by approximately 76% and servicing platform scale by about 39%.
The acquisition is structured as a 100% cash purchase of Toorak’s operating platform, including Merchants Mortgage & Trust Corporation, Toorak’s U.S. direct origination business and its U.S. and U.K. lending operations.
Toorak had approximately 280 employees as of June 30, including about 120 at Merchants. The transaction is expected to close in the fourth quarter of 2026, subject to customary closing conditions.
Following closing, Toorak will retain its brands and Tampa headquarters and continue to be led by founder and CEO John Beacham. Beacham will also become an Executive Vice President of Velocity Commercial Capital.
Barclays Capital advised Velocity financially, while Piper Sandler advised Toorak and KKR. Simpson Thacher & Bartlett and Morgan Lewis served as legal counsel to Velocity, while Dechert advised Toorak and KKR.
KEY QUOTES:
“This acquisition reflects our commitment to scaling responsibly and deepening our presence in segments where we see durable, long-term demand,” said Chris Farrar, Co-Founder and Chief Executive Officer of Velocity. “Toorak’s exceptional team and platform are highly complementary to what we’ve built, and together we’re positioned to serve a broader set of borrowers and capital partners with greater speed and efficiency. We are thrilled to partner with the highly skilled team of professionals at Toorak.”
Chris Farrar, Co-Founder and CEO of Velocity
“When we founded Toorak in 2016, our thesis was that residential real estate investors were underserved by institutional capital. Over $20 billion in loans later, that thesis has been proven. Partnering with Velocity lets us pursue the opportunity at even greater scale,” said John Beacham, Founder and Chief Executive Officer of Toorak. “Our team will continue doing what it does best — serving our borrowers and lending partners with a consistent standard of excellence. I want to thank KKR for a decade of partnership and thank our employees, whose work made this outcome possible.”
John Beacham, Founder and CEO of Toorak
“John and the Toorak team have built an impressive platform that has meaningfully improved financing options for the real estate mortgage market over the past decade,” said Avi Korn and Chris Mellia, Global Co-Heads of Asset-Based Finance at KKR. “We are pleased to have supported their growth through our Asset-Based Finance strategy and are confident that Velocity will be a strong partner to Toorak going forward.”
Avi Korn and Chris Mellia, Global Co-Heads of Asset-Based Finance at KKR
