I have to admit I don’t know a lot about Leon Cooperman, except that I see him on CNBC every once in a while and they make a big deal of that like he’s a heavy weight. Nevertheless, this was enough of an introduction so that when I saw his name come up on the questioner list of Arbor Realty’s second quarter call, I took notice.
Cooperman distilled the idea behind Arbor with clarity. I’ve reposted the most relevant comment below but I would recommend reading the entire exchange (available from Seeking Alpha):
Lee Cooperman – Omega Advisors
Most exciting thing you said this morning, I am trying to understand if I am correct in my understanding. I have been said that you thought you can get a mid-teens leverage return on capital. So, I am trying to forget the linkage of FFO to the mid-teens leverage return on capital. Let’s just say we use an average number, make it easy for you, $8 book value at a 15% return, would imply like $1.20 or so of ongoing earnings and I am curious whether that is a goal that you see as realistic. How that relates to FFO and do you have a timetable in mind for when that kind of profitability to be achieved. This is well above we’re currently earning. And secondly, does the access to the deferred market make it likely that we won’t have to resort to any equity financing, anytime in the foreseeable future?