Rocket Cos. long-awaited initial public offering finally reveals the vast fortune founder Dan Gilbert has built in a city battered by the last financial crisis.

Shares of the Detroit-based mortgage company rose more than 19% on the first day of trading in New York, pushing Gilbert’s net worth to about $34 billion, according to the Bloomberg Billionaires Index.

Thursday’s IPO makes Gilbert, 58, one of the biggest beneficiaries of the era of ultra-low interest rates and caps a career that’s seen him rise from delivering pizzas to befriending Warren Buffett, winning an NBA championship and becoming a figurehead for the transformation of downtown Detroit.

Rocket is valued at about $40 billion, more than Bank of New York Mellon Corp. or Ford Motor Co. Gilbert owns an estimated 73% of the firm.

His net worth is more than four times the previous estimate on the Bloomberg index. It means he’s now the 28th-richest person on the planet, ahead of Blackstone Group Inc.’s Stephen Schwarzman, casino magnate Sheldon Adelson and cosmetics titan Leonard Lauder.

Julia Sahin, a spokeswoman for Rocket Cos., declined to comment.

Quicken Loans is the bedrock of Gilbert’s wealth. It’s the largest retail mortgage originator in the U.S., underwriting about $145 billion in 2019. That powered the company to $892 million in net income in 2019. This year -- despite a pandemic -- origination volumes hit a record in March, April, May and June with falling rates encouraging homeowners to refinance. And those rates keep dropping. The average for a 30-year fixed loan fell to 2.88%, the lowest in nearly 50 years of record keeping by Freddie Mac.

Assembly Line
“Quicken was able to create an assembly line for mortgage banking,” said Les Parker, managing director of consulting firm Transformational Mortgage Solutions.

The specialization of every step in the lending process allowed it to process loans more efficiently, at lower cost, than banks.

The company will have to contend with a mixed tracked record for retail lenders that have gone public, Parker said, with the cyclical nature of the industry making sustained growth difficult. Rocket’s diminished listing came after investors pushed back on the company’s valuation, arguing it should be priced as a consumer or financial company rather than a technology business, a person familiar with the matter said.

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