Annaly cannily invests its capital. A real estate investment trust (REIT), Annaly Capital Management invests in and manages a portfolio of mortgage-backed securities, including mortgage pass-through certificates, collateralized mortgage obligations, and agency callable debentures. Commencing operations in 1997, the firm primarily invests in high-quality securities issued or guaranteed by the likes of Freddie Mac, Fannie Mae, and Ginnie Mae and backed by single-family residential mortgages. More than 95% of Annaly's assets are agency mortgage-backed securities, which carry an implied AAA rating. The firm is externally managed by Annaly Management Company LLC.