Weekly Real Estate News
Summary
Howard Amster disclosed beneficial ownership of 11,269,634 Redwood Trust shares, or 9.0%, in a Sept. 25 Schedule 13D. The filing does not demand a sale, but it arrives after shareholder Bradley Radoff separately urged Redwood's board to begin a sale process.
Investor Howard Amster has disclosed beneficial ownership of 9% of Redwood Trust, adding a large new shareholder position to a mortgage-finance company already facing a separate investor’s demand that its board explore a sale.
Amster reported beneficial ownership of 11,269,634 Redwood common shares in a Schedule 13D filed with the Securities and Exchange Commission on Sept. 25. The filing says the position represents 9.0% of Redwood’s outstanding common stock and that the reporting persons had invested approximately $46.0 million to acquire the shares.
The filing does not say Amster is demanding a sale of Redwood. It says the reporting persons acquired the shares for investment purposes and have no specific present plans for a merger, liquidation, board change or other extraordinary corporate transaction. But the filing leaves open a broad range of future actions, including discussions with management, directors and other shareholders; recommendations concerning Redwood’s capitalization or board; and discussions involving potential business combinations or dispositions.
That distinction is important because Amster’s disclosure arrives less than two weeks after another Redwood shareholder publicly called for the company to be sold.
A 9% position built through recent purchases
The 13D uses 125,612,432 Redwood common shares outstanding as of Aug. 5, the figure reported by the company in its second-quarter Form 10-Q. Against that denominator, Amster’s reported 11,269,634-share beneficial position equals 9.0%.
The holdings span shares owned directly by Amster as well as shares held through affiliated entities, trusts and a foundation over which the filing says he has voting or dispositive authority. The filing reports 11,256,617 shares under sole voting and dispositive power and 13,017 under shared voting and dispositive power.
Recent purchases account for a substantial part of the position. The transaction schedule includes 2.225 million shares purchased on Sept. 18 at $4 per share by the Howard Amster 2019 Charitable Remainder Unitrust #1 and 2,032,283 shares purchased by Amster on Sept. 21 at $4.09 per share.
The filing says personal funds and working capital were used for the purchases. It also says the reporting persons have no present intention to dispose of their holdings, although they may buy additional shares, sell shares or take other investment actions depending on Redwood’s financial condition, its stock price and broader market and industry conditions.
Separate investor has already called for a sale
The new ownership disclosure lands amid an already public fight over Redwood’s strategic direction. On Sept. 14, investor Bradley Radoff released an open letter to Redwood’s board urging directors to hire an investment banker and begin a sale process.
Radoff said he believes Redwood should not remain a standalone public company and argued that strategic buyers could be interested if the company were formally put on the market. Those are Radoff’s assertions, not findings by WRE News. He also said that if the board does not initiate a strategic review, he intends to nominate an alternative slate of directors at Redwood’s 2027 annual meeting.
Redwood executives and directors made several open-market purchases shortly after Radoff’s letter. CEO Christopher Abate bought 100,000 shares on Sept. 15 at $3.839 per share, a transaction worth $383,900, according to his amended Form 4. CFO Brooke Carillo and director Greg Kubicek also reported open-market purchases that day.
Those purchases do not establish management’s intentions regarding Radoff’s proposal, and Amster’s 13D does not state that he supports Radoff’s campaign. The developments are separate. Together, however, they place additional investor attention on Redwood’s ownership, valuation and strategic direction.
Why Redwood matters to housing finance
Redwood is an internally managed real estate investment trust and specialty finance company focused on housing credit. According to the company’s investor-relations materials, its residential housing businesses include Sequoia, Aspire and CoreVest, alongside an investment portfolio built largely from assets sourced through those platforms.
The company provides capital in parts of the housing market that are not primarily served by government programs, including through mortgage securitization, whole-loan distribution and other housing-credit investments. That makes any potential change in control, strategic review or major shift in capital allocation relevant beyond Redwood’s shareholders.
For now, no sale process has been announced. Amster’s filing describes potential avenues for engagement but expressly says the reporting persons do not currently have specific plans for the corporate actions enumerated in the 13D. Radoff’s sale proposal remains his proposal to the board.
Redwood’s SEC-filings page provides the company’s continuing regulatory disclosures. WRE News will follow any board response, amended ownership filing or strategic announcement that changes the situation.
