Fund details
Deer Park Mortgage Opportunity Fund II comes as a closed-end vehicle with an initial three-year life, plus the option to tack on two additional one-year periods. The firm says qualified and accredited investors, both individuals and institutions, can participate.
Why Deer Park is buying
With higher funding costs and more volatile interest rates stretching spreads across credit, Deer Park is positioning to purchase beaten-down securities. As Chief Investment Officer and Managing Partner Scott Burg put it, "Higher mortgage rates and an increasingly diverse mix of collateral and transaction structures have created pricing inefficiencies in non-agency RMBS that we believe can be captured through disciplined, loan-level credit work."
Market backdrop and track record
A Markit index tracking non-agency US RMBS fell nearly 2% by the end of September from its late-June peak, then rebounded 1.7%. Year to date, that gauge has returned 3.6%, putting it on course for its second weakest full-year increase since at least 2013, based on data compiled by Bloomberg.
Deer Park launched the predecessor to this fund in 2024. That earlier vehicle secured $168 million in capital commitments and, as of June 30 this year, delivered a 9.19% annualized return net of fees and expenses.
Savvy investors often look to new tools to gain a subtle edge. We're hosting our first ever investor livestream on 11/17 to show you how to use ChatGPT and Claude to invest like a pro, hosted by Briefs Finance CEO Jaspreet Singh. Save your seat.
What it means for your portfolio
In plain English: wider spreads can lift yields on non-agency RMBS, though rate volatility can jolt prices. Deer Park's new fund underscores demand for complex mortgage credit where pricing looks dislocated, a signal worth watching if you are weighing income beyond Treasuries and agency MBS.
Exploring how technology reshapes investment choices can help you invest more confidently. On 11/17, our CEO Jaspreet Singh goes live for our first ever investor livestream on how to use ChatGPT and Claude to invest like a pro. Register to join him.
