Mortgage company Firstfolio has entered into an heads of agreement with an equity investor, Australian Capital Enterprise, to raise A$57.6 million.Firstfolio announced yesterday that ACE will take $1.7 million of shares in an initial placement, underwrite a rights issue that will raise $8.9 million and then take $47 million of shares in a second placement.Following the issues, ACE will hold between 50.54 per cent and 75.2 per cent of Firstfolio's issued capital, depending on the take-up of the rights issue.The announcement described ACE as "a special purpose company established to hold the investment in Firstfolio Ltd." It has approval for funding, subject to the satisfaction of the conditions in the heads of agreement, from an unnamed US and Korean investment group.Australian Securities and Investments Commission records show that ACE's only director is Brent Christie, a Sydney finance professional.The transaction will be subject to the approval of Firstfolio shareholders at an extraordinary general meeting, which is expected to be held in April.Firstfolio has a $19.9 billion loan book, which it built up through a series of acquisitions over the past few years. Performance suffered as the mortgage market weakened and the company struggled to cope with the higher operating expenses and finance costs associated with its acquisitions.It reported a 50 per cent fall in net profit in the 2011/12 financial year and announced it would undertake a strategic review. Expenses were up 39 per cent and finance costs were up 50 per cent. Borrowings rose from $63 million to $74 million.The board replaced the chief executive, Mark Thomas, but the new CEO, David Hancock, stayed only a couple of months.The company's share price has fallen from a peak of around eight cents in April 2010 to its current range of one to two cents. Firstfolio's main creditor is Commonwealth Bank.