Wellington Denahan is stepping down as chief executive officer of Annaly Capital Management Inc., the largest real estate investment trust that buys mortgage debt.
Annaly President Kevin Keyes will replace Denahan as CEO on Sept. 30. She will retain the title of chairman and also serve as executive chairman, focusing on strategic and capital allocation decisions, the New York-based company said in a statement Monday.
Denahan, 51, became Annaly’s sole CEO in October 2012 after the death of its long-time head, Michael Farrell, with whom she founded the company in 1996.
“I just really wanted to change the focus of what I do for the company, and get back to the things I loved to do early on,” Denahan said in a telephone interview. That includes “less of the day-to-day stuff.”
Annaly’s stock has declined 18.6 percent over the past three years, assuming reinvested dividends, compared with a 13 percent gain for a Bloomberg index of mortgage REIT stocks. Shares of the company, which owned $78.7 billion of assets as of March 31, have dropped 3.7 percent this year.
“Kevin is a proven leader who will enable us to take advantage of the company’s numerous growth opportunities in the evolving market landscape,” Jonathan Green, its lead director, said in the statement. “We also look forward to Wellington’s continuing contributions to the board and the company.”
Under Denahan’s leadership, Annaly expanded from its long-standing focus on government-backed home-loan bonds to also target investments including commercial real-estate debt and equity in properties. She also said the company was reducing the amount of borrowed money it used to guard against the eventual consequences of central banks interfering in markets.
“Whether Mike was here or not here, I think it was a natural transition that the company was embarking on, as a result of everything that was happening around us,” Denahan said, referring to Farrell. “It’s always our hope and focus to try and do the best long-term positioning for our shareholders, and sometimes that’s not always recognized right away.”
In recent years, the company has also lost veteran employees including former Chief Operating Officer James Fortescue, co-chief investment officer Kristopher Konrad and Jeremy “Jay” Diamond, its head of research and corporate communications.
Keyes, 47, who joined Annaly in 2009 after advising the company while at Merrill Lynch & Co., said in the interview that the firm would continue “to do what we’ve been doing” and that Denahan’s new position would be a “real role.”
While the company’s board has faced pressure this year from shareholders including Artisan Partners to repurchase stock, Denahan said that such a move was only a possibility and would need to provide “more than a point in time” benefit.
“We’re not afraid to do it,” Keyes said. “We’ve done it before. We’ve always consider it an option for our capital.”