She is now the company's biggest shareholder
It was something of a family affair at Korth Direct Mortgage Inc. this month.
The CEO of Korth Direct Mortgage (KDM) recently acquired 1.1 million shares of common stock from her predecessor – who happens to be her dad – to become the firm’s single largest shareholder. With bolstered influence, she now plans a few changes at the company.
“I was trying to get my dad to sell me part of his shares for a while, and then I finally talked him into it a few weeks ago,” CEO Holly MacDonald-Korth (pictured) told Mortgage Professional America during a telephone interview this week. “I don’t take ‘no’ for an answer very well,” she joked. “It’s part of how I got here, right?”
Not to be left behind, her father, James W. Korth, will retain the title of chairman of the company. He also retains the title of managing director for subsidiary JW Korth & Co.
For MacDonald-Korth, the shares acquisition is the culmination of years of hard work. “My dad is an investment banker, and he founded a firm called JW Korth and Co., which has a history of underwriting corporate debt,” she said. “I joined that firm about 17 years ago.”
More than 30 years old, JW Korth & Co. is a broker/dealer and RIA (registered investment advisor) that specializes in selling fixed-income investments to dealers, institutions and high net worth retail clientele.
Dad and daughter work closely together
“My dad and I were thinking of additional business ideas and decided to start KDM,” she said. “We started KDM as a subsidiary of JW Korth, but it quickly grew larger and is now the parent company of JW Korth. It’s been an exciting run for the last five or six years.”
Today Korth Direct Mortgage is a national commercial real estate finance firm offering fixed rate loans of up to $100 million for multifamily, office, retail, mixed use, self-storage, industrial and other select property types. Organized in 2016, the Inc. 5000 company has completed some $600 million in balance sheet commercial real estate financing since 2017. Ranging from $5 million to $50 million, the company’s loans are diversified by geography and asset class nationwide.
New initiatives now underfoot
By virtue of her stock purchase earlier this month, MacDonald-Korth now holds 46% of the company’s stock. With such commanding interest, she plans to implement new initiatives at the firm, she told MPA.
“Currently, most of our investors take advantage of investments in independent mortgage deals,” she said. “We are launching a fund to give people the opportunity to invest in our overall lending strategy. So it’ll be a debt fund, a mortgage fund. That’s a new initiative. We are also launching a small balance, multifamily initiative that’s $250,000 to $5 million lending on one- to 25-unit multifamily [properties].”
In announcing MacDonald-Korth’s ascendancy as the firm’s single largest shareholder, a company Press release noted the firm now is a majority women-owned enterprise. Combined with shares owned by Pam Hipp, managing director of sales and distribution of KDM’s Michigan-based JW Korth & Co., the two now collectively own 53% of the company’s common stock.
MacDonald-Korth suggested the women-owned status is no mere window dressing, but reflective of a commitment toward diversity in its business practices.
“We’re looking to get involved in some of the emerging manager initiatives that some of the large asset allocators have that work with pension funds and things like that,” she said. “On a personal level, I like to get involved in projects that help housing affordability and sustainability, and am always looking for opportunities to work with other women- and minority-owned firms.”
She allowed herself to indulge in the sense of accomplishment of being part of a majority-owned firm, particularly given the male-dominated nature of the industry.
“I’m happy about it,” she said. “You know, it’s funny when we go to conferences and things like that, the proportion of women is so small, and there are not a lot of firms our size that are run by women or owned by women,” she said. “So I’m pretty excited, and think it’s a big accomplishment. Hopefully it helps open a few additional doors for us and we continue to grow.”
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