Two Harbors Investment Corp.

Matthew Koeppen serves as Chief Investment Officer, a role he assumed in October 2025 after previously heading mortgage servicing rights strategy. He reports to CEO William Roth. The firm internalized management in 2023, meaning investment decisions are made by an in-house team rather than an external advisor.

The firm funds its portfolio through a combination of common and preferred equity, repurchase agreements, and securitization. Its wholly owned conduit, Agate Bay Mortgage Trust, issues non-agency mortgage-backed securities. Leverage on the agency book typically runs between 5x and 8x equity, while credit assets carry significantly lower borrowings.

Two Harbors operates as a hybrid REIT, allocating roughly one-third of its capital to mortgage servicing rights and non-agency securities. This credit sleeve generates returns that are less correlated to interest rate moves than a pure agency portfolio. The mix means its dividend yield and book value per share can diverge materially from peers like AGNC Investment Corp.

Pine River Capital Management launched Two Harbors externally in 2009 and managed its portfolio under an advisory contract for 14 years. The management agreement was terminated in 2023 when Two Harbors internalized, acquiring the employees, systems and intellectual property. Pine River retains no management role, though its founder's private investments may hold residual equity.

Two Harbors explicitly focuses on residential mortgage assets. It does not have meaningful exposure to office, retail, or industrial properties. While its mortgage servicing rights portfolio includes some multifamily Ginnie Mae loans, the firm's credit book is concentrated in single-family residential and legacy RMBS.

Since the 2023 internalization, executives are compensated through salary, bonus, and equity awards tied directly to Two Harbors' common stock. This replaces the prior structure where the external manager earned a base management fee and incentive compensation based on portfolio returns. The board's compensation committee benchmarks pay against a peer group of internally managed public REITs.

The firm actively hedges the agency portfolio using interest rate swaps, swaptions, and Treasury futures to manage duration and convexity risk. The disclosed objective is to protect book value against parallel rate shifts while preserving net interest income. The mortgage servicing rights portfolio provides a natural partial offset, as MSR values typically rise when rates increase and mortgage prepayments slow.