Real estate lender Velocity Financial has entered into agreements to manage a $3bn (£2.2bn) business-purpose loan (BPL) portfolio from Toorak Capital and acquire its operating platform.

KKR-backed Toorak is a business-purpose lending and asset management platform, with Velocity acquiring the firm to scale its origination and servicing, broaden its lending business as well as expand its reach in the UK, where Toorak has a presence alongside the US.

“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 of Velocity.

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Toorak provides real estate investors with capital to buy, renovate and rent residential properties. Since its inception, it has funded more than $20bn in cumulative volume across almost 43,000 loans.

Toorak has also entered into a separate agreement with a third-party investment firm to sell its existing BPL portfolio. In connection with the closing of the transactions, Velocity will also enter into an agreement with the third-party investment firm to manage the portfolio acquired from Toorak.

The total value of the platform and portfolio transactions is estimated at approximately $3.2bn, according to Velocity.

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The BPL portfolio includes short-term single-family and multifamily residential transition loans, ground-up construction loans and long-term rental property loans secured by residential properties.

Following the acquisition, Toorak will retain its existing brands, management team and Tampa headquarters while becoming a subsidiary of Velocity Commercial Capital.

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