“We’re excited to make a strategic investment in MAXEX as they bring standardization to an otherwise fragmented sector of the residential mortgage market,” said Simpson, managing director and head of non-agency whole loan and RMBS trading at J.P. Morgan. “We are eager to see continued growth at MAXEX as they build a more liquid marketplace for trading mortgage loans.”
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In addition to the investment, Pearce said they created an equity incentive model designed to encourage co-investments in MAXEX from other buyers on the platform and motivate them to trade through the exchange, creating greater liquidity for sellers.
“This consortium model is consistent with the way other leading fixed income marketplaces have achieved broad market adoption,” he said
Existing investors like AGNC Ventures and Moore Asset Backed Fund also participated in the investment. Terms of the investment were not disclosed.