It's one of Baltimore's better-kept secrets: A locally based company with a high-yielding stock whose dividends are largely free from taxes, and whose shares have generated solid returns, thanks to shrewd, real estate-related investments.
The company is Municipal Mortgage & Equity LLC, nicknamed MuniMae. So far, the MuniMae formula seems to be working. Its shares are up about 40 percent since the stock was issued in August 1996. Its stated dividend yield is about 7 percent -- and roughly 85 percent of those dividends are free from taxes. What's more, the company is pushing for growth.
"We think what we have is a unique investment," said Mark K. Joseph, 59, MuniMae's chairman and chief executive officer. "We've combined our experience with municipal financing with real estate to produce growth -- and tax-exempt dividends. It's the intersection of public finance and the capital markets."
If you stood at that intersection expecting Joseph to be a smooth-talking wheeler-dealer, you'd be disappointed. Indeed, the gray-haired executive seems more like a college professor than capitalist: cerebral, friendly, and fond of discussing literature or social issues.
A graduate of Harvard Law School who jokes that he only "pretended" to practice law, Joseph spent about half his career in public service, including one stint as Baltimore City's deputy housing commissioner and another as president of its school board.
What he really wanted was to be a real estate developer.
Out of that desire sprouted the Shelter Group, a private company that's split into three parts: One that develops property, another that owns and manages property, and a foundation whose charge is creating housing for low-income families and the homeless. And out of the Shelter Group grew MuniMae, which debuted in 1986 as the SCA Tax-Exempt Fund, a closed-end partnership that held real estate bonds.
As a closed-end fund whose shares weren't listed, the SCA investment wasn't very liquid -- it wasn't easy for investors to buy and sell. In August 1996, the venture was transformed into a limited liability company (which has certain tax advantages) with its shares listed on the American Stock Exchange as Municipal Mortgage & Equity.
In January, MuniMae made its second foray into the capital markets. Legg Mason Wood Walker, Merrill Lynch & Co. and Wheat First Butcher Singer helped raise about $65 million
