- Opendoor said on Friday that it has hired Daniel Morillo to become the firm’s chief investment officer.
- Morillo comes from Citadel, where he was the $34 billion hedge fund firm’s head of equity quantitative research for five years.
- Before that he had an almost 10-year tenure at BlackRock, where he held multiple leadership roles.
- Opendoor is working on closing a SPAC deal that will take the home-flipping company public.
- Visit Business Insider’s homepage for more stories.
Home flipping and reselling company Opendoor announced today that it has hired Daniel Morillo, a current Citadel and former BlackRock executive, as its chief investment officer.
Morillo is currently a managing director and head of equity quantitative research at $34 billion Citadel, where he runs the hedge fund firm’s equity research and analytics. A spokesperson for Citadel told Business Insider that Morillo would leave the firm at year-end, and a spokesperson for Opendoor told Business Insider he would join the firm by Jan. 1st, 2021, at the latest.
He will become Opendoor’s first-ever CIO, leading the firm’s pricing analytics and data science efforts. He is joining CEO Eric Wu, chief product officer Tom Willerer, CFO Carrie Wheeler, and CTO Ian Wong on the firm’s executive team as they look to close a SPAC deal that will bring Opendoor public.
Read more:Here’s how Opendoor is pitching a path to profitability as it gears up to go public via a SPAC
iBuyers make money by buying homes, doing slight renovations to them, and then reselling them, charging a fee to the home seller and attempting to sell at a profit. The companies have relatively small margins, according to one analysis the companies make 1.3% per transaction, and look to use data analysis to extract higher margins out of each sale.
Morillo brings 20 years of data and risk management experience. He’s spent the last five years at Citadel, and also had an almost 10-year tenure at BlackRock, serving as the global head of investment research for the firm’s ETF brand iShares and as the co-head of BlackRock’s model and portfolio solutions group.
The news comes a month after Opendoor announced plans to merge with Social Capital Hedosophia Holdings Corp II, a SPAC led by venture-capitalist Chamath Palihapitiya. The deal values Opendoor at $4.8 billion dollars, and the company expects to raise $1 billion.
Special-purpose acquisition companies — aka “blank-check” companies — are having a moment on Wall Street. This year has seen 159 SPAC IPOs, almost triple the amount for all of 2019 according to SPAC database Spacinsider.com.
While Opendoor sold 18,799 houses in 2019, an increase of 152% from the 7,470 houses it sold in 2018, the service is not profitable. The firm’s adjusted EBITDA was negative $218 million in 2019, according to a presentation in filings about the SPAC deal. Home-flipping can be a capital-intensive business, and that measure excludes factors including interest, taxes, depreciation, and amortization.
Read more about the SPAC frenzy: Meet 16 bankers, lawyers, and capital providers helping engineer a $40 billion blank-check craze that’s fast-tracking companies to public markets
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