Technology platform Figure, which powers a liquid, blockchain-based marketplace for financial products, and global investment firm Sixth Street today announced the formation of a new joint venture vehicle in which Sixth Street’s asset-based finance platform has committed to invest $200M of equity.
Per a press release from Figure, Sixth Street’s commitment can be recycled and used for future Figure production, driving additional liquidity for Figure private credit loans.
The partnership is expected to securitize Figure loans, forward-sell its bonds to investors and buy loans from originators, therefore opening up a liquid marketplace, the release stated. It will start with Figure HELOCs with future plans to buy other non-agency credit assets.
The joint venture marks the latest development for Figure Connect, Figure’s blockchain-based marketplace that was launched in June 2024 for private credit loans. Figure Connect’s advantages include warehouse lines to manage cash flow, hedging to manage market risk and modern infrastructure that automates loan sales and deliveries, all on a public, transparent blockchain.
“This joint venture between Figure and Sixth Street puts Figure Connect on a trajectory that is ultimately intended to lower costs for lenders and borrowers, similar to how borrowing costs were lowered with the introduction of TBAs in the agency mortgage space. It validates Figure Connect as the largest, most liquid, blockchain-based capital market,” said Todd Stevens, chief capital officer of Figure.
Michael Dryden, partner and head of asset based finance at Sixth Street, echoed Stevens’ sentiment.
“We’re excited to be an integral partner in this Figure Connect marketplace milestone and support the strategic growth of a transformational solution for loan originators and investors,” Dryden said. “We’re thrilled to bring our deep experience in residential mortgage investing to form this joint venture with Figure and its Figure Connect marketplace platform, which we believe is a stand-out leader that can support the evolution of home equity as well as the broader private credit market.”
