New Residential Investment Corp., one of the fastest growing mortgage real estate investment trusts in the U.S., has an overseas fan in Nan Shan Life Insurance Co. of Taipei City, Taiwan.

According to a 13-G filing with the Securities and Exchange Commission, Nan Shan has amassed a 5.2% (17.8 million shares) stake in the New York-based real estate investment trust.

The filing does not state the purpose of the investment, but it’s likely passive in nature. A media inquiry sent to Nan Shan had not been returned as Inside MBS & ABS went to press.

Overseas investors have been steady buyers of agency MBS the past decade, but not necessarily as large owners of REIT equities.

By purchasing equity in MBS-investing REITs, have foreign investors found a new way to play the market? Perhaps. Some REITs, including market leaders Annaly Capital Management and AGNC Investment Corp., pay dividends north of 11.0% to their common stockholders.

The last tally by this publication has Taiwan listed second among foreign holders of U.S. MBS and ABS at $228.1 billion. Japan was ranked first at $235.5 billion, and China third at $180.9 billion.

Nan Shan, though, already owns equity positions in several American companies, including technology darlings Amazon and Facebook.

Records available through the SEC reveal that the Taiwanese insurance company this past fall cut its holdings in AGNC down to 185,980 shares, so it’s already been in the REIT space to some degree.

New Residential currently pays a dividend of 11.65%. At the end of 2018, its balance sheet included $11.6 billion in real estate securities (mostly MBS) and mortgage servicing rights valued at $2.8 billion.

The servicing-hungry REIT eked out a tiny profit of just $348,000 in the fourth quarter of 2018, after taking a $73.5 million impairment charge on the value of its whole loans, plus a $67.3 million hit from deferred taxes.

There wasn’t a whole lot of color on impairments in its just-released earnings statement, nor in a supplemental filing available through its investor relations website. Instead, New Rez boasted about its acquisition of mortgage servicing rights in the fourth quarter ($19 billion) and for the full year ($114 billion).

Its GAAP net profit totaled $963.9 million in 2018, compared to $957.5 million a year ago, an improvement of less than 1%.

At yearend, its MSR portfolio — excluding “excess” rights — totaled $390.0 billion, making the REIT the nation’s fifth-largest servicer overall, according to figures compiled by Inside Mortgage Finance.

– pmuolo@imfpubs.com