Tag: gescobro

Offers for Gescobro Fall Short of Cerberus’s Asking Price

13 May 2019 – La Información

Cerberus Capital Management cannot find a buyer for Gescobro. The US investment fund put the debt recovery specialist on the market at the beginning of the year, but so far the offers submitted have fallen well below its expectations in terms of price.

Hoist Finance, the Spanish subsidiary of a Swedish bank, and Cabot, a British fund dedicated to the purchase of non-performing loans (NPLs), have expressed the greatest interest in Gescobro, but their offers, amounting to around €200 million each, fall well short of Cerberus’s initial expectations of between €300 million and €350 million.

Sources in the market are questioning the value that Cerberus is assigning to Gescobro, given the current market prices and its operating profit (its EBITDA amounted to €11.3 million in 2018). Nevertheless, the US fund is defending its price thanks to the high number of problem loan portfolios that the company has acquired in recent years, whose gross value amounts to more than €8.6 billion.

Specifically, Gescobro is currently managing 12 unsecured loan portfolios with a combined nominal value of €8.3 million and 2 secured loan portfolios with a nominal value of €300 million. The prices of such portfolios typically reach less than 5% and around 30%, respectively. The debt recovery firm also employs 410 workers and has agreements to manage €3.5 billion in NPLs for the main Spanish banks.

Original story: La Información (by Pepe Bravo)

Translation/Summary: Carmel Drake

Cerberus Plans to Create a Real Estate Giant by Acquiring Altamira & Solvia

10 November 2018 – Expansión

Cerberus is increasing its commitment to the Spanish real estate market. The US fund is the favourite candidate to take over the reins at Altamira, the manager of property loans and foreclosed real estate assets currently owned by Apollo and Santander. Moreover, Cerberus is battling it out with the fund Lindorff (now Intrum) and other investors to purchase Solvia.

As Expansión revealed on 8 October, Apollo renewed its contract with the investment bank Goldman Sachs at the beginning of the summer and distributed the teaser (the sales document containing a general description) to potential interested parties to dispose of this asset for between €500 million and €600 million. Although it is not alone in the process, Cerberus is the candidate that has the best chance of acquiring that company.

But Cerberus is not going to settle for that asset only. Financial sources assure that the US fund is also bidding for Solvia, in a process in which it is also competing with Lindorff. The CEO of Sabadell, Jaume Guardiola, noted, during the presentation of the results on 26 October, the “good appetite” in the market for Solvia, “whose sale will close “soon”. He whereby confirmed the sale of Solvia Servicios Inmobiliarios (SSI) and Solvia Desarrollos Inmobiliarios (SDI). For the sale of SSI, in which it is being advised by Alantra, the bank hopes to receive up to €400 million.

Concentration of the market

If Cerberus ends up being the winner of both processes, it will become the clear leader of the servicer sector and a proponent of concentration between the servicers. These companies, created from the former real estate subsidiaries of the banks, have become some of the stars of the new real estate cycle.

Currently, almost all of the assets under management of the banks are in the hands of a few companies such as Altamira, Servihabitat, Haya Real Estate, Aliseda, Anticipa, Solvia and Divarian (previously Anida). These firms are mainly responsible for the management and recovery of debt and transformation of loan obligations into foreclosed real estate assets, as well as the sale and rental of assets.

If Cerberus ends up taking control of Altamira and Solvia, it will control almost 65% of the market for servicers, which will allow it to mark a differentiation in its strategy. Currently, the US fund controls Haya Real Estate, one of the large servicers with €40 billion in assets under management. Moreover, it took over the reins at Anida, which was in the hands of BBVA, and which manages €13 billion.

If it adds Altamira and Solvia to its portfolio, the volume of assets under management will soar to €138.9 billion, with a market share in the servicer segment of 65%. According to numbers managed by the consultancy firm Axis, the other two dominant funds are Blackstone, with Anticipa and Aliseda (also from Santander) and LoneStar, which controls Servihabitat after purchasing that company from La Caixa in the summer.

Other assets

In addition to the servicers, Cerberus is also the owner of the property developer Inmoglacier; the online estate agency between individuals Housell; and the debt recovery company Gescobro (…).

Original story: Expansión (by R.Arroyo and D.Badía)

Translation: Carmel Drake

Cerberus & Blackstone Compete to become Largest RE Firm in Spain

16 October 2018 – Expansión

The US funds Cerberus and Blackstone are battling it out for first place on the podium in the Spanish real estate sector. Cerberus, which has just completed the purchase of 80% of BBVA’s real estate business, has invested more than €10 billion in real estate transactions in the country over the last year. Specifically, Cerberus will now control 80% of Divarian Propiedad, the company to which BBVA has transferred its real estate business and in which the bank will retain the remaining 20%. The groups have not disclosed the price of the transaction or the value of the assets included in Divarian, although the bank did indicate at the time that its intention was to transfer assets with a gross accounting value of approximately €13 billion at an estimated price of around €4 billion.

Anida’s workforce

Divarian, which is going to be managed by Cerberus, will incorporate the specialist staff from BBVA’s former real estate platform, Anida, comprising 400 professionals, into its team.

In addition to this operation, known as Project Marina, Cerberus reached an agreement with Santander in the middle of September to purchase a portfolio of residential properties for around €1.535 billion comprising 35,700 properties, including parking spaces and storerooms. This transaction followed Project Jaipur – a portfolio of property developer loans also acquired from BBVA -; the portfolios Challenger and Coliseum, with a combined gross value of around €9.1 billion, acquired from Sabadell; and Ágora, the portfolio that Cerberus purchased from CaixaBank.

In addition to the purchase of real estate portfolios, Cerberus is the owner of: Haya Real Estate, the largest independent Spanish servicer with €40 billion in assets under management; the property developer Inmoglacier; the online real estate agency between individuals Housell; and Gescobro, the debt recovery company.

The fund, which has not specified how much it has invested since it arrived in the country, has become, together with Blackstone, one of the most active players in the purchase of doubtful debt portfolios (NPLs) and foreclosed assets (REO) with real estate collateral, and has closed more than 30 transactions in Spain over the last five years, even before the recovery of the sector.

Testa

Meanwhile, Blackstone has acquired around €20 billion in property since 2012, to which the Socimi specialising in residential rental assets, Testa, must be added, given that the US fund now controls 70% of that firm’s share capital. The fund marked a milestone last year when it purchased 51% of Banco Popular’s real estate business from Santander, with a book value of around €10.3 billion. To group together the assets, Blackstone and Santander created Project Quasar Investment, a company that includes Aliseda.

The fund is also the largest owner of hotels in Spain through HI Partners and Hispania, one of the leaders in the logistics and office ownership market in Spain.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

CaixaBank Repurchases 51% of Servihabitat from TPG for €176M

8 June 2018 – Expansión

The financial institution, which until now owned 49% of the real estate firm, is going to restore control of 100% of the firm four years after it sold the majority stake to TPG.

CaixaBank has announced an agreement with the fund TPG to repurchase 51% of the real estate manager Servihabitat for €176.5 million. With this operation, which will return full control over the real estate subsidiary to the financial institution, CaixaBank wants to enjoy “greater flexibility and efficiency in the management and marketing” of its real estate assets “as well as a reduction in its costs”.

The operation, which still needs to be approved by the competition authorities, will have a negative impact of around 15 basis points on CaixaBank’s first level capital ratio (CET1 fully loaded) and of around €200 million on the bank’s income statement this year.

Nevertheless, the entity chaired by Jordi Gual expects the impact to be positive over the next few years, amounting to around €45 million per year.

The financial institution sold 51% of Servihabitat to TPG in 2013, in an operation that valued the real estate subsidiary at €370 million and which generated a gross gain of €255 million for CaixaBank, which retained control of the remaining 49%.

The agreement between CaixaBank and TPG included a clause whereby Servihabitat would manage La Caixa’s real estate assets for a decade. Less than five years after that agreement was announced, CaixaBank has decided to recover 100% of the share capital of its real estate servicer.

In January, Iheb Nafaa was appointed as the CEO of Servihabitat to replace Julián Cabanillas, who had been linked to the firm for two decades, and who had served as the most senior executive for the last twelve years.

Nafaa is an Engineer in Statistics, Econometrics and Finance from the École Nationale de la Statistique et de l’Administration Économique in París (France) and has extensive experience as a director of companies such as BNP Paribas, GE Capital and Gescobro.

Original story: Expansión (by J. Díaz)

Translation: Carmel Drake

Cerberus Gets its Cheque Book out again to Buy NPLs from CaixaBank

4 December 2017 – Voz Pópuli

Cerberus is stepping on the accelerator in Spain. The US fund has starred in another major operation just days after acquiring a real estate portfolio from BBVA. One of Cerberus’s subsidiaries, Gescobro, has won an auction for €0.8 billion in non-performing loans and real estate from CaixaBank.

The fund has purchased part of that portfolio, known as Project Egeo, whilst the Norwegian group Lindorff has bought the rest, according to financial sources consulted by this newspaper.

Part (€0.5 billion – €0.6 billion) of this €0.8 billion portfolio comprises unsecured loans (credit cards, personal loans and others without any guarantee) and just over €0.2 billion relates to loans to SMEs secured by real estate.

This is Cerberus’s fourth operation in the Spanish financial and real estate sector in 2017 following the acquisition of Project Jaipur from BBVA (€0.6 billion in non-performing property developer loans; the purchase of the real estate arm of Liberbank, Mihabitans, for €85 million; and the acquisition of €13 billion in property from BBVA for €4 billion.

Strategic fit

The sale of Project Egeo, which is still pending the completion of the necessary paperwork, forms part of the routine divestment plans of the Catalan group. In this way, it is managing and controlling its default rate and complying with the regulatory requirements of the European Central Bank (ECB).

Currently, the group’s default rate stands at 6.4%, after falling by seven tenths in the last year. In total, its doubtful loans amount to €15.3 billion, of which €13.9 billion are in Spain. It has another €7.2 billion in foreclosed assets.

The firm that has won the auction, Gescobro, has been led by Iheb Nafaa until now, but he was recently poached by Servihabitat, the real estate company owned by TPG (51%) and CaixaBank (49%).

Meanwhile, Lindorff has been one of the main competitors in the bank debt market since 2012. More than a year ago, it expanded its real estate business with the purchase of Aktua, the former real estate arm of Banesto; and it strengthened its business through a merger with Intrum Justicia.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

How Cerberus Became Spain’s Largest RE Company

3 December 2017 – Voz Pópuli

If you are thinking about buying a home over the next few months, statistically, it is likely that Cerberus will be the vendor. The US fund is one of the players that arrived in Spain at the height of the financial crisis (between 2010 and 2012), with the objective of acquiring banks and real estate companies, just like it had done in other countries. The former did not happen, despite several attempts to take over some of the former savings banks. But the conquest of the property sector went a lot better: so much so that the fund now controls more than €50 billion in assets and has just starred in the second largest operation in the Spanish real estate sector in recent years.

Those close to Cerberus define it as a fund that is meticulous, aggressive in its negotiating style and persistent. It has proven that last quality with the patience it has shown searching for major operations in Spain over many years. Last week, it finally was in a position to purchase BBVA’s property. It is the fund’s largest acquisition to date in Spain and it is going to cost €4 billion, most of which will be financed by Morgan Stanley.

Five key people inside the fund have been instrumental to the success of this operation, namely: Frank W. Bruno, one of the main directors of the fund at the global level; Lee S. Millstein, another key director of Cerberus, who has been overseeing the business in Spain for years; Manuel González-Cid, Senior Advisor to the fund and former Finance Director at BBVA, and his team; David Teitlebaum, head of the fund in Europe; and Daniel Dejanovic, head of the real estate business in Europe.

The Aznar junior factor

Several other people have also participated, although to a lesser extent: Carlos Abad, CEO at Haya Real Estate, the real estate servicer of Cerberus in Spain; Juan Hoyos, former President at McKinsey in Spain and President of Haya; John Snow, President of Cerberus, who met with the President of BBVA, Francisco González, to propose the deal in the first place; and José Maria Aznar Botella, son of the former Spanish President. The story of this fund in Spain has been inextricably linked to the incorporation of Aznar junior in recent years, at least from the point of view of the media. The bankers who have worked with him describe him as a “strong professional” who has been key to the fund’s success in Spain.

Both Hoyos and Aznar were most certainly instrumental during Cerberus’s first operation in Spain, in 2013, when it purchased Bankia Habitat, in the so-called Project Platform. It was a purchase that revolutionised the sector and paved the way for other similar deals, such as the sale of Altamira, Servihabitat and Anticipa.

Unlike what has happened with BBVA, Cerberus’s operation with Bankia did not involve an asset purchase, but rather the management of that entity’s assets. Like in other similar operations, the fund takes control of the workforce and the administration and sale of debt and foreclosed assets, in exchange for management commissions. Bankia Habitat became Haya Real Estate and subsequently expanded its perimeter after teaming up with Sareb, Cajamar and, this year, Liberbank. Those deals involved the disbursement of around €0.5 billion by Cerberus. Added to the €4 billion paid to BBVA and the fund’s other portfolio purchases, the total figure exceeds €5 billion.

The result of this strategy is that Haya Real Estate has reached a management volume of more than €40 billion, has almost 700 employees and recorded a profit of €31 million (in 2016).

Cerberus’s networks in Spain do not end there: it owns a doubtful debt management firm, Gescobro; a securitisation firm, Haya Tutulización; a stake in another manager of bank debt, Hipoges, whose sale it is currently negotiating with KKR; and dozens of companies where it keeps its real estate assets. As if they were not enough, it will soon be able to add the property developer Inmoglacier to this list.

And that is only one of the strings to Cerberus’s bow in Spain, it also engages in large business ventures such as Renovalia, which is currently up for sale. Operations such as the one involving BBVA reflect the fact that funds like this are still very interested in Spain, despite the uncertainties being generated by Cataluña. And beyond the foreign money that they bring, they should be seen as the new influential players, capable of moving markets such as the real estate sector. And they are here to stay. For the time being at least.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Operation Tramuntana: CaixaBank Assesses Offers Worth €200M

31 May 2017 – Voz Pópuli

CaixaBank is accelerating the sale of Project Tramuntana, one of the largest divestments that the Spanish bank is currently working on. The entity chaired by Jordi Gual is looking to sell off almost €600 million in unpaid loans linked to real estate developments.

The three funds that have progressed through to the final round of the process are: Cerberus, Deutsche Bank and Bain Capital, according to financial sources consulted by Vozpópuli. Those funds have reportedly put offers on the table of around €200 million for the portfolio during the non-binding offer phase.

They now have one more week to analyse all of the loans in the portfolio before submitting their binding offers, given that the cut-off date that was initially stipulated for this sales process was 8 June. With this, CaixaBank wants to be certain about who has won the bid by the middle of next month, so as to have all of the paperwork ready to close the agreement before the end of the first half of the year and whereby include the results in its half-year accounts.

CaixaBank sold the second largest volume of problem assets in Spain in 2016 (€2,100 million), after Banco Sabadell (€2,800 million) and ahead of Abanca (€2,100 million), Sareb (€1,400 million) and Bankia (€1,100 million), according to data from Deloitte.

Buyers

Project Tramuntana is almost a replica of an operation closed last year, Project Carlit, in which CaixaBank sold a portfolio of loans worth €850 million to Goldman Sachs. In addition, the entity sold hotel loans to Apollo.

Of the buyers left in the running, Cerberus is the one that most urgently wants to purchase the portfolio, given that it did not win any of the processes that it participated in last year. The US fund needs to accumulate assets in order to leverage its two platforms in Spain, Haya Real Estate, which it purchased from Bankia, and Gescobro.

Bain Capital, meanwhile, was the largest buyer of bank portfolios in Spain last year, acquiring real estate assets and debt worth €1,700 million from Sabadell, Bankia, Cajamar.

Meanwhile, Deutsche Bank also had a busy year. On the one hand, it bought assets from several entities, such as the case of the Ocean portfolio, from Bankia, but it also sold the majority of the problem assets held by its own bank in Spain. They were purchased by Oaktree, which forced the entity chaired by Antonio Rodríguez Pina to recognise a provision amounting to €68 million.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

Cerberus Sees Five More Years Of Portfolio Sales In Europe

9 May 2016 – Expansión

The largest opportunistic fund thinks that the market will remain active in Europe for another five years. That was the view, expressed last week, by the Head of the US fund Cerberus, the investor that has acquired the most toxic debt from banks and governments in Europe.

“I expect the opportunity to buy doubtful loans to last for at least another five years. In baseball terms, we are still in the early innings”, said John Snow (pictured above), the co-founder and CEO of Cerberus.

Last year, according to Bloomberg, the fund invested €28,000 million in debt in Europe, including Northern Rock mortgages, which were sold by the British Government.

Cerberus is also one of the most active international investors in Spain.

In recent years, it has acquired two platforms, which themselves buy problem assets from banks: Haya Real Estate, the former Bankia Habitat, for the management of real estate assets; and Gescobro, for the management of unsecured debt.

In Spain in recent years, besides these two platforms, Cerberus has also acquired AyT, the securitisation fund manager owned by Ahorro Corporación and Cecabank; Cimenta2, the real estate arm of Cajamar; and the firm Patron Properties.

Advisors

The fund relies on several high profile advisors for its strategy in Spain, including Juan Hoyos Martínez de Irujo, the former President of McKinsey España; Francisco Luzón, the former CEO of Santander; Manuel González Cid, the former Financial Director of BBVA; Francisco Lamas, a former Director at McKinsey; and José María Aznar Botella, the son of the former President of the Government.

Cerberus came close to signing one of the largest deals in Spain last year. The US fund offered Bankia just over €2,000 million for a 75% stake in its foreclosed assets, as part of Project Big Bang, which was eventually suspended by the entity chaired by José Ignacio Goirigolzarri.

Original story: Expansión (by J. Z.)

Translation: Carmel Drake

Fortress Puts Its ‘Paratus’ Platform Up For Sale

29 May 2015 – Expansión

Project Coast / Fortress wants to dispose of one of its platforms, with 40 employees and a portfoliol of loans and homes amounting to €700 million.

(Photo: Michael Novogratz, Director at Fortress Investent Group)

Fortress, one of the first opportunistic funds to arrive in Spain has put up the ‘for sale’ sign over part of its business in Spain. The US fund has announced the disposal of its distressed debt management platform and of a portfolio of loans and homes amounting to almost €700 million.

The possible sale comes at a time when international investors are reviewing their strategies in Spain following the results of the regional and local elections. Even so, sources close to the transaction indicate that this deal was launched long before the election results were announced and that the fund remains firm in its commitment to Spain.

The investor has taken the decision after it completed the purchase of Lico Leasing from savings banks last year, with 500 employees and assets worth €600 million.

Former GMAC

Following this purchase, Fortress wants to sell its Paratus platform. The firm originated from General Motor’s former financing arm, GMAC. After being rescued by the US Government in 2008, GMAC – currently known as Ally Financial – sold its European business to Fortress, which represented the fund’s first foray into Spain. The fund started to purchase non-performing loan portfolios in Spain in 2009, and ended up managing a portfolio amounting to €4,000 million.

The opportunistic fund has engaged N+1 to advise on the sale of Paratus; several weeks ago the consultancy firm distributed information to potential investors regarding the so-called Project Coast. Following the first phase of the process, this week N+1 will announce which funds and platforms will go through to the final phase, which is expected to close at the beginning of July.

According to sources in the financial sector, this transaction is primarily targeted at overseas funds that want to establish a base in Spain. Investors such as Elliot – with Gesif -, D.E. Shaw – with Multigestión – and Cerberus – with Gescobro – have closed similar deals in recent years.

According to the information distributed by N+1, Paratus currently manages four asset portfolios and has two service contracts, which in total correspond to assets under management amounting to almost €1,000 million. The sale also includes the current team, comprising 43 professionals.

Almost €700 million of the loans and homes managed by Paratus will be transferred into the hands of the buyer. Of those, €426 million are unsecured loans without any kind of collateral; €152 million are loans secured by 866 properties; and another 500 homes are worth just over €100 million. Most of the real estate exposure is located in Cataluña, Andalucía and Valencia.

New strategy

Following this sale, Fortress will focus its strategy in Spain on Lico Leasing and on its subsidiary Geslico – where it recently undertook an ERE –, which render similar services to those offered by Paratus. Through Lico, the fund has a banking licence as a financial credit establishment, which was granted by the Bank of Spain in December 2014.

Fortress has altered its strategy in Spain after its failed attempts to buy a real estate subsidiary, such as Altamira and Aliseda, and to enter Sareb’s capital.

Following those endeavours, it completed its largest purchase in Spain, by purchasing debt in Realia amounting to €440 million, and since then, it has acquired small real estate portfolios and participated in the financing of indebted companies.

The fund in Spain is led by the banker José María Cava, founder of Gladia Capital and a former director of BBVA.

Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake

International Funds And Socimis Hire First-Rate Executives

4 May 2015 – Expansión

Director appointments in Spain / Large international investors and Socimis have been recruiting senior Spanish executives to design their strategies in the country and identify real estate opportunities.

Large overseas investors are hiring first-rate advisors to lead the businesses that they have acquired in Spain. Over the last six months, funds such as Cerberus, Apollo and Lone Star have hired former directors of Ibex companies to support them (execute) their strategies in Spain.

Some of the Spanish Socimis have also hired first-rate executives, including Uro Property and the listed real estate company Hispania, owned by Azora.

Through these appointments, investors are taking the third step in a process to strengthen their strategies to conquer the Spanish real estate sector. To begin with, they put certain Spanish-speaking executives in charge of entering the market. Such was the case of Andrés Rubio (Apollo), Juan Pepa (Lone Star) and Michael Abel (TPG).

The next step was the acquisition of real estate platforms, such as Altamira, purchased by Apollo; Bankia Habitat – now Haya Real Estate – acquired by Cerberus; and Neinor, which was awarded by Kutxabank to Lone Star.

Following these purchases, the funds have sought advice from top executives. “Some of the funds’ foreign directors have made successful acquisitions, but they now need highly skilled, top-level, local professionals to implement their business plans”, says Patricio Palomar, Director of Alternative Investment at CBRE.

“The hardest thing in the real estate sector is finding and accessing opportunities, but these experienced professionals have the skills to achieve that”, adds Carlos Ruiz-Garma, Director of Business Development at Aguirre Newman.

New hires

The most active fund in terms of new recruits has been Cerberus, which has hired two senior bankers for its Spanish subsidiaries in the last few months. Franciso Luzón, former board member and Vice President at Santander, is now a board member at Haya Real Estate, the real estate company that inherited Bankia Habitat’s business; and Manuel González Cid, the former Finance Director at BBVA, has joined the board of directors at Gescobro, the firm that specialises in debt collection.

Another big name signing was that of Oscar Fanjul, as a board member of Altamira, the real estate company owned by Apollo. Fanjul is Vice President at Omega Capital and used to be the Chairman of Repsol.

The fund Lone Star has also drawn on the market for former directors of listed companies to strengthen its strategy. This investor, which purchased Kutxabank’s property developer for €930 million at the end of last year, has hired Juan Velayos to lead the project; he used to be a Partner at PwC and who was the CEO of Renta Corporación until 2011. Lone Star will reveal its strategy for Neinor over the next few weeks.

In the face of all of these new signings, one of the largest funds to show its commitment to Spain, TPG – which is the majority shareholder in Servihabitat – substituted the former banker Rodrigo Rato last April.

Socimis

The Socimis, (many of) which are in turn owned by international investors, are also committed to hiring experienced directors. In this sense, the real estate manager Azora, which controls Hispania, hired Juan María Nin as a board member at the end of last year; until June 2014, he was the CEO of CaixaBank.

The Socimi Uro Property has also followed in the same footsteps; Uro owns some of Santander’s (branch) network and it has appointed Carlos Martínez Campos as its Chairman; he was formerly the Chairman of Barclays España until its sale to CaixaBank. The banker also used to chair Prosegur.

In addition to the signings of former directors of Ibex companies, the opportunistic funds have also hired at least a dozen other executives in recent months. For example, Gonzalo Gómez Navarro, from the Empark Group, has joined Altamira; and the former directors of Sareb, Walter de Luna and Juan Barba, joined Acciona Inmobiliaria and Meridia Capital, respectively.

Original story: Expansión (by Jorge Zuloaga)

Translation: Carmel Drake