Annaly Capital Management was founded in 1996 (or formally incorporated in early 1997) by Michael A.J. Farrell and Wellington Denahan in New York City. Established as a mortgage real estate investment trust (REIT), its mission from the outset has been to generate attractive risk-adjusted returns by investing in and financing residential and commercial real estate–related assets.
The firm’s principal activity involves borrowing funds—largely through short-term repurchase agreements—and deploying the proceeds into various mortgage-backed securities (MBS), including those issued or guaranteed by Fannie Mae and Freddie Mac. As of late 2023, approximately 88% of its portfolio comprised agency MBS, though the company also holds non agency residential credit, mortgage servicing rights, and commercial real estate assets. It earns income from the spread between what it earns on these investments and its cost of financing, typically enhanced by leverage.
Annaly is one of the largest mortgage REITs in the United States, with a focus on disciplined portfolio diversification and leverage management. It maintains a diversified capital allocation framework to balance returns and risk across its investment segments—Agency, Residential Credit, and Middle Market Lending. Its scale and ability to navigate interest rate cycles position it as a foundational player in mortgage finance.
Annaly continues to refine its investment mix through active portfolio management, hedging interest rate exposures, and strategic capital deployment. Though exact future projects aren’t publicized in non-financial reports, the company routinely seeks to optimize its Agency MBS holdings, grow its residential credit and servicing rights exposures, and enhance its commercial lending platform. Its enduring objective remains delivering consistent income to shareholders through leverage-efficient allocation of capital.