Copernicus Hires Ex-Altamira CEO Andrés Cerdán

21 September 2019 – Andrés Cerdán, who was previously the CEO of Altamira Asset Management, has joined Copernicus as CEO, according to market sources.

Cerdán had led Altamira since 2010 but decided to decamp after the firm was acquired by DoBank, a European firm controlled by Fortress, for about €360 million.

Copernicus, founded in 2013 by José Nestola, manages about €9 billion in NPLs and real estate assets for banks.

Original Story: El Confidencial – Agustín Marco

Adaptation/Translation: Richard D. K. Turner

Apollo Sells Altamira to DoBank (Fortress) for c. €500M

31 December 2018 – Expansión

Apollo has sold its 85% stake in Altamira Asset Management to doBank, a firm constituted by the US fund Fortress. Market sources state that the operation amounted to around €500 million.

Expansión revealed in October that Apollo had engaged Goldman Sachs to sell the servicer that manages the real estate assets of Santander and Sareb for around €600 million.

Altamira has assets under management amounting to approximately €55 billion and operates in Spain, Portugal, Cyprus and Greece. The company’s estimates indicate that it will obtain revenues of around €255 million in 2018 and an operating profit before amortisation (EBITDA) of €95 million.

Altamira’s main value stems from the long-term contract that it holds with Santander, as well as the management of Sareb’s assets (the latter account for almost 30% of the total value of its assets under management).

At the moment, Sareb is analysing whether or not to renew its contracts with all of the servicers with which it works, but Altamira has been diversifying its client base for months, incorporating domestic and international players alike.

Apollo in Spain

During the last quarter of 2018, Apollo Global Management has exited two of the major investments that it has made in Spain over the last four and a half years: Evo Banco and Altamira.

Despite that, Fred Khedouri, a senior partner at Apollo, President of the Investment Committee of the European Principal Finance Fund and President of the Board of Altamira, has already told Expansión that the European Principal Finance Fund III is “going to invest in Spain”, with almost USD 5 billion at its disposal.

Original story: Expansión (by D. B.)

Translation: Carmel Drake

Apollo Negotiates the Sale of Altamira to Dobank (Fortress) for €500M

21 December 2018 – El Confidencial

The sale of Altamira, the historical real estate arm of Banco Santander, is facing its most decisive moment. The Italian group Dobank has positioned itself as the primary candidate in recent days to purchase the platform owned by Apollo and Santander, amongst others, by submitting an offer for between €500 million and €550 million, according to financial sources consulted by El Confidencial.

The offer is somewhat lower than Apollo and its other two partners in Altamira’s share capital, the Canadian pension fund CPPIB and the Abu Dhabi fund ADIA, had expected. Between the three of them, they control an 85% stake, whilst the remaining 15% is in the hands of Santander.

The shareholders engaged Goldman Sachs to coordinate the sale with the aim of obtaining proceeds of €600 million. Nevertheless, the lack of competition has decreased the price in recent weeks. The deal was also influenced by the withdrawal of Intrum, which decided not to buy Altamira after winning the bid to acquire Solvia, according to the same sources.

That price difference means that Apollo and Goldmans are taking their time over the completion of the operation. Apollo, CPPIB and ADIA paid €664 million for the 85% stake in the real estate firm back in the day. Despite that, they do not have to reach that figure to recover their investments, given that they have received various dividends in recent years that compensate their profitability figures.

Dobank is the Italian platform owned by Fortress, the US fund that used to operate in Spain in the recovery of financial assets, through Paratus, Geslico and Lico Corporación.

The platform has been interested in entering the Spanish market for a while and regards Altamira as the ideal partner, given that it is the property manager that has been the most committed to internationalisation. It already operates in Portugal, Cyprus and Greece and the next major market into which it wants to expand is Italy.

Santander has not yet decided what it will do with its 15% stake in Altamira, whether to sell it together with the stakes of the other shareholders or to hold onto it to retain some control over the future of the platform, which still manages some of its assets.

Original story: El Confidencial (by Jorge Zuloaga)

Translation: Carmel Drake

Cerberus, Intrum & DoBank Bid to Acquire Altamira

15 November 2018 – El Confidencial

There is still an appetite for the servicers’ business. The sale of the 85% stake that Apollo owns in Altamira is making its first cut of candidates, with some of the most high profile investors in the segment amongst the finalists. According to financial sources, the fund Cerberus (Haya Real Estate), the Swedish firm Intrum (Nordic Capital) and the Italian firm DoBank (Fortress) are the candidates that have progressed in the process, which is being coordinated by Goldman Sachs, and which was relaunched after the summer following months on the table.

Other players in the sector interested in Spain are also in the process, both at the domestic and European level. One of those new candidates is the US firm Davidson Kempner, which has a portfolio of USD 30 billion under management and with interests in the transformation of toxic assets in the United Kingdom and Ireland, according to sources involved in the operation.

Apollo is willing to take advantage of the hunger for this type of vehicle to make gains, although it does so after four years at the helm of the servicer and having not been awarded any of the large real estate portfolios that the banks have sold (Santander to Blackstone, BBVA to Cerberus, CaixaBank to Lone Star and the Sabadell-Solvia process, in whose final stretch it is not participating). In fact, this divestment comes after Apollo’s manager for the last few years – Andrés Rubio – left the fund.

The price of the management platform could reach €1.5 billion (debt included), a business for which Apollo paid €664 million in January 2014 in exchange for an 85% stake (the remaining 15% is still owned by Banco Santander). The agreement comprised the management of toxic assets (recovery of loans and sale of properties) until 2028, although the transformation of that perimeter has led to a change in the management conditions (commissions) and to the repayment of a €200 million dividend.

Altamira has assets under management amounting to more than €50 billion, compared with €26 billion in 2014, and a portfolio comprising more than 82,000 properties at the end of 2017, making it the largest servicer in operation in Spain. In addition to its contract with Santander, it also manages assets for Sareb (which account for 30% of its portfolio) and for third parties – international investors, financial institutions, family offices and institutional clients – as a result of the international expansion plan launched in 2017.

Original story: El Confidencial (by Carlos Hernanz)

Translation: Carmel Drake

CPPIB, doBank & Haya Compete for Altamira

14 November 2018 – Cinco Días

The sector of real estate servicers for assets proceeding from the banks is in flux. The latest process in the market to catch the attention of major funds and operators in the sector involves Altamira, the firm controlled by the manager Apollo, which owns 85% of the company, and Santander (15%). The first entity to make a major bid has been its competitor Haya Real Estate (owned by Cerberus), as published by Cinco Días on 8 November. That offer has now been joined by one from CPPIB, the Canadian Pensions Fund and one of the largest investors in the world.

Another player interested in Altamira Asset Management, according to financial sources, is the Italian firm doBank, formerly UniCredit Credit Management. That listed entity is controlled by Fortress. It is the largest doubtful loan manager in the transalpine country. Meanwhile, Canada Pension Plan Investment Board (CPPIB) is a fund that manages the pensions of 20 million Canadian people, with assets worth €245.7 billion.

Altamira was created by Santander as a servicer for its toxic assets linked to property. In 2013, the bank sold 85% of the entity to the US fund for just under €700 million. Five years later, the manager from New York, which has not managed to star in any of the major bank portfolio purchases, has decided to exit the company. The amount of the operation, a sales process that has been entrusted to Goldman Sachs, is expected to exceed €600 million.

Altamira has become one of the large managers of financial and real estate assets in Spain, with a total volume of assets under management of €53.8 billion compared with €26 billion at the end of 2014, and with more than 82,000 properties, on behalf of around fifteen clients.

In recent months, there has been significant movement in the shareholders of these servicers, in large part linked to the sale of the bank portfolios. If Cerberus, through Haya, manages to acquire Altamira, it will be the third entity that the US fund controls, after Haya and Divarian (formerly Anida, linked to BBVA). The idea of the fund is to integrate it with Haya to relaunch that firm’s debut on the stock market, as reported by this newspaper. Blackstone, in turn, controls Aliseda (previously owned by Popular) and Anticipa. Lone Star acquired Servihabitat (formerly owned by La Caixa) this summer, and Sabadell has also put Solvia up for sale, another servicer that also interests Cerberus.

Original story: Cinco Días (by Alfonso Simón Ruiz & Pablo Martín Simón)

Translation: Carmel Drake

Kronos to Invest Another €500M by 2021 to Become the New Real Estate King

16 May 2018 – Press Release

The real estate developer created by a former director of Fortress now owns a  land portfolio spanning more than 1 million m2 for the construction of 8,000 homes.

Led by the investment manager Kronos, the real estate company Kronos Homes has become one of the largest property developers in the country, in just four years, with a land portfolio that exceeds 1 million m2.

Saïd Hejal leads the company. The Parisian founded Kronos in 2014, after several years studying the Spanish market from London as the head of one of Fortress’s investment funds. “I was in charge of investments in Southern Europe (Portugal, Spain, Greece and France) for Fortress, with a particular focus on Spain from 2012 onwards. We chose Spain because we believed that it was the market with the greatest future growth potential with respect to the other European countries”, explains Hejal, Managing Partner of Kronos.

Unlike other investors, the former executive of Fortress opted to create his own property developer and grow it to become one of the largest landowners in the country. “I have worked for years in the US, and there, the property developers were focused on design; in Spain, we saw the opportunity to create a company based on design, that’s why we chose to create a company, with a new image, rather than acquiring an existing one”.

To carry out this project, Hejal went to a group of investors who, through Kronos Asset Management, put together the funds to create the Spanish developer. “Kronos is the owner of Kronos Homes, the brand of the residential developer. We have an office in London since most of our investors are based all over Europe; they are family offices and global investors. In total, we have around 15 investors, who arrived after the company was created, although the family that founded Kronos is also still with us”, explains.

Since its creation, Kronos Homes has invested €500 million in the purchase of land. “We have a portfolio spanning 1 million m2, which will allow us to develop 8,000 homes. The plots are located in Madrid, Cataluña, Costa del Sol and Alicante. Now we are entering some of Spain’s large capitals such as Córdoba, Sevilla, Tarragona and Cadiz”, says Hejal who predicts more new acquisitions. “We plan to invest another €500 million over the next 24 to 36 months”.

To this end, Kronos is backing the selective purchase of land. “We have acquired two thirds of our current portfolio from banks and the other third from developers; we have also completed several operations with Sareb and we will continue to work in this way”.

Thus, he rules out the possibility of corporate operations, giving priority to organic growth. “We are not interested in buying other companies. Such deals typically involve very difficult processes, combining corporate cultures and requiring a lot of time for integration.”

Kronos closed 2017 with 500 homes sold, among their developments in Madrid, Barcelona, Costa del Sol and Alicante. “2017 was quite a good year, better than expected, and 2018 is going very well, too. We have some very expensive projects and others that are more affordable. Our cheapest house costs around €145,000 and the most expensive, €2 million. The latter is a spectacular project in Estepona (Málaga), designed by Rafael de La-Hoz”.

“Our typical customers are first-time buyers, who have budgets of between €300,000 and €400,000.”

Stock market

Unlike other investors, the head of Kronos Homes is not planning to debut his firm on the Stock Exchange – “we are not interested, there are too many distractions”, he says – but he does plan stay with the company for many years. “Our plans in Spain are long term, we have already developed ten projects, this year we will deliver more than a hundred homes (133) and launch six new promotions. In 2019, we will launch another 20, including a project in Valencia that will be the tallest residential building in the city, with 34 floors”.

The plans of Kronos coincide with other ambitious bets from property developers such as Aedas, Vía Célere and Metrovacesa. “I think it is good that there is competition, it is healthy and positive for the consumer. We have positioned ourselves in a certain niche, with a focus on design and architecture, and that is what makes us different.”

Original story: Press Release

Edited by: Carmel Drake

Axis: Spain’s Banks Have €31.7bn in Toxic Assets Up For Sale

15 March 2018 – Eje Prime

After a 2017 in which one of the key characteristics of the residential market was the interest from funds in going to banks for property, this year, the trend is set to increase. The investment funds are now being joined by Socimis, which want to take advantage of the rapid and generous divestments that the banks are undertaking of their real estate portfolios.

Pressure from the European Central Bank (ECB) for the financial entities to clean up their balance sheets has meant that they have been rushing, for the last year and a half, to sell almost all of their portfolios of assets and non-performing loans relating to the real estate sector. According to data from the consultancy firm Axis, the banks currently have €31.7 billion in toxic assets up for sale.

This large sum of portfolios up for sale is proving to be the subject of major battles between the main investment funds, the majority of which are international, and which in 2017 managed to close record operations in this sense. The sale by Santander of property inherited from Popular to Blackstone for €10 billion, and the agreement reached between BBVA and the fund Cerberus for €4 billion to transfer assets from the real estate firm Anida, fired the starting gun for a race that is going to reach its cruising speed this year, according to Cinco Días.

Spain is the third country in the Eurozone by volume of doubtful loans, with €136 billion and a default rate of 5.7%, a percentage that is above the European average of 5.1%. According to the Bank of Spain, non-performing loans held by the banks at the end of 2016 amounted to €190 billion.

The oligopoly of the servicers 

Axis details that the assets of the banks under the management of the servicers are no longer going to be a question of five, since some of the players may come out of the equation. In 2018, “there will be a greater concentration in the market, with the sale of some of the servicers”, according to the study.

Until now, 80% of the portfolios have been managed by the banks and funds, as demonstrated in the cases of Altamira, which is controlled by Banco Santander; Haya and Anida, companies that are both linked to Cerberus; Anticipa and Aliseda, which are both owned by Blackstone; and Servihabitat and Solvia, which are owned by CaixaBank and Banco Sabadell, respectively.

In addition to the aforementioned funds, Axis adds others with a presence in the Spanish market such as Lone Star, Oaktree, Deutsche Bank and Fortress, which will try to acquire one or more of the portfolios for sale.

Funds and Socimis are going to be searching to generate returns this year, above all, in the rental market, which with yields of 8% “is going to be the product with the most attractive investment prospects”, according to Axis.

Original story: Eje Prime

Translation: Carmel Drake

Lar Launches Fund to Coinvest in Residential Segment in Spain & Latam

12 March 2018 – Expansión

Founded in 1975 by Felipe Pereda, the real estate developer Lar was one of the few high-profile companies during the boom that survived the subsequent crash. Having become the manager of one of the largest real estate companies on the stock market, Socimi Lar España, the company owned by the Pereda family has not been neglecting its house building activity. “We are currently working on residential projects in seven countries. At the global level, we are working on projects involving 18,000 units”, explains Miguel Amo, Director General of the Lar Group.

This extensive portfolio also includes the Spanish market, where the company has focused on the residential business, after years of investing in shopping centres (it has a clause not to invest in commercial assets beyond the Socimi). “The first thing we did when we saw the signs of recovery in the market in 2013 was to team up with Fortress to acquire a portfolio containing almost 1,400 homes and plots of land spread all over Spain from Sareb. With that batch, we created a FAB (banking asset fund), which expires this year, with the delivery of the final homes. Next, we entered the luxury business, with Lagasca 99, a project that we are managing and in which we also hold a stake through the Socimi. And, with the market recovering, we saw the opportunity for new build projects”, said Amo.

First fund

Last year, after selecting several plots of land, Lar opted to create a fund, called Acacias Inmuebles, to promote seven projects with 450 homes in total. “The vehicle was created in July 2017 with €35 million and we have now invested 100%. We manage it and we own 30% of the vehicle (…) and the rest is owned by investors from Spain and Peru (…), explains the head of Lar.

In total, Acacias Inmuebles is going to promote five primary residence projects over the next three years in Madrid, Valencia, Málaga, Torremolinos and Sevilla, and two other second-home developments in the Malaga towns of Benalmádena and Mijas (…).

The success of that first vehicle has caused the real estate company to launch a second fund. “We are asking for a minimum capital investment of €500,000. It is a fund without any intermediary liquidity, but which will distribute dividends when the projects are handed over and the investments will be recovered within a period of between three and five years, with an approximate annual return of 12%”.

Besides Acacias and Lagasca, Lar owns other plots for the development of an additional 400 homes. “They are located in Móstoles (Madrid) and Valladolid; in the case of the latter, we will likely sell off some of the land to be developed by third parties”, said Amo. In addition to its activity in Spain, the majority of Lar’s developments are based abroad, primarily in Latin America.

Specifically, Lar, which was one of the first Spanish real estate companies to branch out overseas (in 1998) has 9,000 homes under construction in Mexico, another 5,000 in Peru and 1,300 in Colombia (…) “We are also building in Romania. We always do it by ourselves, in conjunction with a local team, and we are very happy with the results so far”.

Revenues

Thanks to all of these projects, Lar had forecast revenues of between €400 million and €450 million in 2017, which would be added to the fees received for the management of the Socimi. “2017 was a good year in all areas, we sold 1,500 homes in private contracts and 1,300 were notarised. This year, we will hand over 1,500 homes, of which between 200 and 300 will be in Spain”, highlights Amo.

Lar is also committed to buying land for its subsequent management. “In Spain, we are also going to intensify our investment in land. We think that developable land is running out all over Spain, after 10 years with no investment and, so there is a need to “manufacture” land. We want to acquire plots for at least 1,000 homes and if we can buy land for 3,000 units, then even better”.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Fortress Unwinds Its Final Positions In Spain

7 September 2017 – Voz Pópuli

Fortress has definitively closed a chapter in its history in Spain. The US vulture fund, regarded as one of the most aggressive in the world, has launched two operations in the market through which it is looking to offload its final positions in the Spanish financial sector.

The two deals in question are Project San Siro and Project Baresi. In total, they comprise paid and unpaid loans worth around €300 million, according to financial sources consulted by Vozpópuli. The candidates to buy these loan packages include other opportunistic funds.

The two projects essentially comprise the final dregs of the portfolio that Fortress holds in the Spanish banking sector: loans from Santander, Barclays España (now part of CaixaBank) and Lico Leasing, the former finance company of the savings banks that Fortress purchased at the height of the crisis.

The US fund, led in Spain by the banker José María Cava, was one of the first to enter the financial sector at a time when the lack of trust at the international level was at its peak. It was between 2010 and 2011, when the first interventions of the savings banks began and several cold mergers were carried out, which gave rise to groups such as Bankia.

Critical time

Fortress completed its acquisition of a portfolio from Santander in 2012, just before the rescue of the finance sector. In that deal, Fortress purchased €1,000 million in consumer credits from the group chaired by Ana Botín.

A year later, the US fund announced the purchase of Lico Leasing. That was Fortress’ last major operation in Spain, which broke down just two years later. The fund took a long time to obtain authorisation from the Bank of Spain to approve that acquisition, and so by the time it did receive it, the credit tap had been reopened and so Lico arrived late to the recoveries sector.

For that reason, Fortress decided to close this business and its other financial commitments in Spain. First, it sold one of its recoveries platforms (Paratus) to Elliott and Cabot. Next, it sold Geslico to Axactor. And in terms of the other portfolios (Lico, Santander, and Barclays), it let some of them mature and the remainder is what is now being put up for sale.

It also leaves behind other possible opportunities that the fund considered, such as its failed entry into the share capital of Sareb and of other savings banks, with which it was unable to reach an agreement due to the significant price differences. Fortress is now more focused on other business niches in Spain and most notably in the Italian market, where it purchased, together with Pimco, the largest portfolio of loans, worth €17,000 million, from Unicredit last year. Given its profile, the Spanish banking sector will become the focus of Fortress once again when the next crisis hits.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

D.E.Shaw Purchases €103m Of Property Developer Debt From Bankia

3 April 2017 – Idealista

Bankia has managed to sell Project Gold, a portfolio of property developer loans amounting to €102.97 million. According to market sources, the buyer is the investment fund D.E. Shaw Group. As a result of this operation, the bank chaired by José Ignacio Goirigolzarri (pictured above) has managed to decrease its doubtful debt balance by €77.24 million and sign its first portfolio sale of the year.

Project Gold comprises a portfolio of doubtful and non-performing loans amounting to €102.97 million, from a variety of industrial sectors, although the property developer segment accounts for the lion’s share.

According to a statement from Bankia, this operation allows the entity to fulfil a dual objective: to reduce delinquency, by selling off doubtful and non-performing loans, and to increase liquidity and free up resources for the granting of new loans. The sale of this package has reduced the entity’s doubtful debt balance by €77.24 million.

The bank has another batch up for sale: Project Tour is a package worth €166 million, containing 1,800 properties, including finished homes, land, commercial premises, industrial assets and hotels. These assets are located primarily in the Community of Valencia, led by Valencia; Cataluña, led by Barcelona; the Canary Islands, led by Las Palmas; Madrid and Castilla y León (where Segovia is home to the most assets).

The entity chaired by José Ignacio Goirigolzarri is known in the market as one of the most dynamic entities: in 2016, it had several portfolios up for sale in the market, including Project Ocean, a real estate loan portfolio worth almost €400 million, which was sold to Deutsche Bank; Project Tizona, containing mortgage loans worth €1,000 million; and Project Lane, with properties worth €288 million.

More than €2,000 million in homes and debt up for sale

According to data compiled by Idealista, the banking and extra-banking sectors currently have more than €2,000 million up for sale in the form of non-performing loans secured by properties and real estate assets (homes, premises, offices, industrial warehouses and land).

Some portfolios are well-known, such as BBVA’s Project Vermont, a batch of property developer loans secured primarily by newly-constructed homes, worth almost €100 million. Several funds were interested in acquiring that lot, specifically, Oak Hill, Fortress and AnaCap.

The same entity has several more packages on the market: Project Buffalo, which comprises homes worth €400 million in total. Another project from the entity chaired by Francisco González is known as Boston, which comprises 16 office buildings located in Madrid, Barcelona and Valencia, worth €200 million. Finally, Project Rentabiliza is a portfolio containing debt to property developers.

In addition, Liberbank has Project Fox on the market, a portfolio of real estate debt worth around €200 million. It is the entity’s first (but not its last) portfolio of unpaid mortgages.

Original story: Idealista (by P. Martínez-Almeida)

Translation: Carmel Drake