Telefónica Finalises the Sale of 25 Data Centres for €600M

15 April 2019 – Expansión

The telecommunications giant Telefónica is expected to complete the sale of a portfolio of 25 data centres located in the USA, Europe and Latin America after Easter, as it continues its efforts to reduce its debt.

One of the best-positioned candidates in the bid to acquire the assets is Asterion Industrial Partners, a fund founded by Jesús Olmos, former Director of KKR, in November, which has already fought off competition from the infrastructure fund Brookfield, amongst others.

Two other investment vehicles have also reportedly expressed significant interest in acquiring the portfolio, namely, EQT and I-Squared Capital, as have two companies in the sector, the US firms Digital Realty and Equinix.

Of the portfolio of assets, eight centres are located in Spain, three in Brazil, three in Colombia, three in Ecuador, two in Peru, two in Chile, two in Argentina, one in Miami and one in Mexico.

With this new divestment, which is expected to generate proceeds of around €600 million, Telefónica will succeed in reducing its debt below €40 billion.

Original story: Expansión (by D.B., M.Á.P., I.C. and R.C.)

Translation/Summary: Carmel Drake

KKR Finalises Its Purchase Of Hipoges & The Pepper Group

24 October 2017 – Voz Pópuli

The investment giant KKR is multiplying its commitment to Spain. The US fund is on the verge of signing two operations, which will see it obtain real influence in the property and financial sectors. Moreover, it is participating in other major processes to purchase portfolios of banking assets, such as Project Invictus, although Bain Capital is expected to be victorious in that case.

The next operation to be signed in the market is the deal involving Hipoges. And according to financial sources consulted by Vozpópuli, KKR has imposed itself in the sales process of that recovery and real estate asset management platform, which was founded in 2008 by former directors of Lehman Brothers.

KKR’s offer has convinced the vendors – comprising the main directors and the fund Cerberus, which holds a 40% stake – ahead of the bid submitted by the British group Cabot. Sources in the market estimate that the price will amount to €25 million – €30 million in the end.

With the purchase of Hipoges, KKR will be able to compete on equal terms to acquire large portfolios of problem assets from the banks. In this regard, four large funds dominate the market: Blackstone, owner of the platform Anticipa and now Aliseda; Apollo, which controls Altamira; Cerberus, a shareholder of Haya Real Estate; and Lone Star, the main investor in Neinor. KKR is led in Spain by Jesús Olmos and Alejo Vidal-Quadras (pictured above).

Other funds in this league include TPG, which owns 51% of Servihabitat, although it has maintained a rather low profile in recent months; and Oaktree, which manages its assets through Sabal Financial.

What is Hipoges?

Hipoges is one of the main independent servicers, alongside Finsolutia, TDX Indigo and Copernicus. It has 200 employees across four countries and it manages loans and properties worth €8,000 million.

On the other hand, KKR is currently finalising the takeover of the Australian firm, the Pepper Group. That consumer financing institution has a lot of activity in Spain, through 300 employees, and has just made the leap into traditional banking with the acquisition of a small Portuguese entity, which also has a branch in Madrid: Banco Primus. As such, Pepper will soon start to grant mortgages in Spain.

Pepper was one of Banco Popular’s partners, in one of the last alliances to be signed by Ángel Ron; however, it only lasted for a few months until Emilio Saracho broke off the agreement.

The group will be an investee company and so the executives of KKR are not expected to get involved in the management of the company beyond sitting on the Board of Directors of the holding company in Australia. Even so, Vidal-Quadras has participated in the operation to value the business in Spain, and so his opinion will be taken into account when determining the financial entity’s strategy.

Original story: Voz Pópuli (by Jorge Zuloaga)

Translation: Carmel Drake

KKR Defies Sovereign Fears & Teams Up With Catalan Property Developer Corp

24 June 2016 – El Confidencial

One of the largest private equity funds in the world has arrived with a bang in the Catalan real estate market. KKR is finalising an agreement with the property developer Corp to invest together in new developments, according to three sources familiar with the talks. The agreement is pending the final signature only.

The operation represents a breath of fresh air for the Catalan real estate market, which in recent times, due to the sovereign crisis and the triumph of Ada Colau in Barcelona, has seen several international funds start to regard the region with distrust and give orders to concentrate their investments in Madrid. However, that tension seems to have now diminished.

The importance of these types of funds for domestic property developers is crucial, given that in the face of the shortage of bank financing and the gradual recovery in demand, they are teaming up on a large scale with these types of vehicles, which inject the money they need to build homes.

Although both Corp and KKR declined to comment, the sources consulted confirmed that the US fund is handling this operation through its recently created Real Estate fund for Europe, which has raised $739 million (around €655 million).

As a result of this operation, the firm led in Spain by Jesús Olmos, is redoubling its commitment to the real estate business, where its largest operation to date had been the purchase of a 5.4% stake in another high-profile property developer, Quabit, one of the great survivors of the crisis, which has started to set up its cranes again to build 476 homes.

Moreover, KKR held negotiations with Acciona to strengthen the ties that already bind them in the energy business, by also acquiring a stake in its real estate division, but it seems that that operation has been ruled out in the end. Moreover, two years ago, the firm hired Alejo Vidal-Quadras de Caralt to lead its office in Madrid and join the wave of funds investing in the domestic real estate business.

Property developer of the moment in Cataluña

Grupo Corp is one of the property developers of the moment in the Catalan market. Created in 2008 by Pedro Molina and Pau Castro, the two businessmen knew how to detect business opportunities at the height of real estate crisis that decimated the sector.

Bearing in mind the maxim that from great crises arise great opportunities, Molina and Castro took the wise decision to target the middle-class public, with modern designs and sustainable, high-quality homes, at affordable prices.

In fact, a snapshot of their properties could be summarised as homes measuring around 100 m2, with between two and four bedrooms, located in middle-class neighbourhoods and marketed at prices that range between €170,000 and €370,000.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake