Blackstone & Goldmans Compete For Sareb’s €1,000M Portfolio

16 November 2016 – Voz Populí

Sareb is witnessing a battle between the two largest investors in the world: the fund Blackstone and the investment bank Goldman Sachs. The two US giants are the only two finalists in the largest asset sale launched to date by the Spanish bad bank.

Project Eloise contains 200 unpaid loans to property developers worth €1,000 million. This is the largest sales process launched to date by the company chaired by Jaime Echegoyen (pictured above). After a year without any operations of this kind, Sareb has reactivated the sale of portfolios in an attempt to boost its accounts for the year, following the downturn in revenues during H1 2016. According to several experts consulted, Sareb may obtain obtain between €300 million and €400 million from this sale.

For Blackstone, it would not be the first agreement with the Spanish bad bank. In recent years, the US fund has acquired several portfolios from Sareb, as well as from several Spanish entities. Blackstone manages its Spanish real estate assets through Anticipa Real Estate, the former CatalunyaCaixa Inmobiliaria, which it purchased from the Catalan savings banks before their sale to BBVA.

The CEO of Anticipa, Eduard Mendiluce, said recently in an interview with Efe that Project Eloise was going to be analysed in detail given its significant appeal. This platform already manages around €10,000 million in problem loans and has a stock of 5,000 homes, many of which are structured in Socimis.

Meanwhile, the strategy pursued by Goldman Sachs is more opportunistic. It participates in occasional portfolio sales and often works in partnership with another fund. In the past, the US investment bank has teamed up with the giant TPG, owner of 51% of Servihabitat, the real estate arm of CaixaBank. Nevertheless, in July, it joined forces with another fund, D.E. Shaw, in an operation to purchase assets from the Catalan entity.

Given its scale, Project Eloise was always going to be reserved for large investors only, such as Blackstone and Goldmans. Even so, eyebrows have been raised in the sector over the fact that none of the other (very active) investors in Spain, such as Oaktree, Bain Capital, Bank of America, Apollo and Cerberus, have made it through to the final round.

Key period

Sareb is putting everything on the line with this operation. This company needs to boost its revenues during the last quarter of the year in order to fulfil its commitment of continuing to repay its debt guaranteed by the State. (…).

The company’s sales decreased by 14% during the first half of the year, from €1,628 million during the first half of 2015 to almost €1,400 million between January and June this year. Sareb still owns assets worth €42,487 million and has debt (with the entities that transferred their assets to it) amounting to more than €43,000 million.

The aim of the company is to move both figures close to €40,000 million by the end of the year. To this end, in addition to Project Eloise, it has also put other portfolios up for sale, including Project Antares, containing debt with eight creditors.

Original story: Voz Populí (by Jorge Zuloaga)

Translation: Carmel Drake