Tag: TPG

Servihabitat Hires Two New Executives: Rato & Cortina

19/03/2014 – Expansion

CaixaBank is soon going to welcome Amparo Moraleda in its managing board, where she will replace Susana Gallardo. At the moment, Moraleda chairs Sistemas y Servicios de Iluminación Eficiente (SSIE). Additionally, she is a member of several listed companies´administrations, such as Corporación Alba, Meliá Hoteles or Alstom.

Moreover, Servihabitat Servicios Inmobiliarios (the bank´s asset managing firm) has hired Rodrigo Rato and Alfonso Cortina as directors in newly formed administrative board. The ex-director of Bankia and the former chairman of Repsol will enter Servihabitat on the motion of TPG that bought 51% of the real estate company last summer.

The purchase contract granted four seats in the managing board to the U.S. fund and three to CaixaBank. The eighth, chief executive, is taken by Julián Cabanillas.

When it comes to TPG, apart from Rata and Cortina, two other executives have been incorporated in the fund: Michael Muscolino (a partner from London) and Fernando Magnet O’Dogherty.

The three seats in CaixaBank are taken by Antonio Cayuela, Ramón Noguera (responsible for Building Center) and Lluis Vendrell. (…).

Original article: Expansión (S. Saborit/J. Orihuel)

Translation: AURA REE

Vulture Funds Manage Half of the Banks´ Property

If you have ever wondered of buying property from a bank in upcoming years, the odds are high that the operation will be finalized by a foreign fund called Apollo, TPG or Kennedy Wilson. The international investors already manage 52% of the awarded banking assets after the recent purchases of the two real estate companies: Altamira from Santander Bank and Aliseda from Popular. And it points just the tip of the iceberg.

In the contrary to the recession of 90s, the banks cannot wait to get rid of the real estate ballast and focus on their traditional work: granting credits and taking deposits in.

Inside the strategy, five entities (six if Banesto taken into account) transferred the management of their property to the third-parties: Santander by selling 85% of Altamira to Apollo for 664 millon Euros (with 550 million capital gain); Popular, handing control over Aliseda (valued at 815 million Euros) to Värde Partners and Kennedy Wilson for 415 millons; CaixaBank that sold 51% of ServiHabitat to TPG for up to 189 millons; Bankia that transferred its real estate company to Cerberus for about 90 millons; and Catalunya Banc that did the same, selling to Kennedy and Värde property valued at 60 millon Euros.

(…) In the next 10 years the funds will be responsible for administration and commercialization of 82.000 properties dumped into banks during the recession, valued at 20.000 million Euros.

Positioning

Answering the question “what´s in it for the foreign funds?”: their aim is to become super real estate companies and sell their business once Spain recovers from the crisis. Thus, not only are they interested in banks´platforms but also they are acquiring debt of the large companies of the sector: for instance Realia, Colonial or Metrovacesa.

Vulture funds usually invest for five to ten years, planning to sell when the real estate sector revives. (…) In Spain a race among the funds may be observed, running for positioning themselves as benchmark real estate managers. (…)

At the moment the most successful competitor is the consortium of Kennedy Wilson and Värde Partners, managing 25.000 million Euros in assets and loans. TPG, Apollo and Cerberus follow the funds at a distance.

Pending Transactions

(…) Sabadell gave clues of selling Solvia, the biggest real estate company after absorbing CAM. BBVA has not shown any inclination to get rid of Anida. Another real estate company bound to change the owner soon is the one of NCG, that has been already put on sale few months ago.

Source: Expansión

TPG and Baech Buy Two Buildings in Madrid for 23.6 Million Euros

The Community of Madrid´s regional Government organized an auction of six buildings occupied by the administration in November. The aim was to gain at least 78 millions. Finally, the bidding organized by Addmeet managed to sell only two units, located in the Gran Vía Street, number 3 and 18. In spite of that, it has excelled the initial price by 27.4% and by 18.98%, respectively.

Gran Vía 18 was adquired by an American fund TPG for 18.6 million Euros (…). A Spanish family office Baech Bienes purchased Gran Vía 3 for 8.06 millions, while the initial price was 6.3 million Euros. Both buyers were assisted by Aguirre Newman.

 

Source: Expansión

CaixaBank earns 255 million Euros by selling its 51% of Servihabitat to TPG.

Carom shot with multimillionaire earnings in Group La Caixa. The savings bank announced yesterday the sale of 51% of Servihabitat Gestión Inmobiliaria to the U.S. group TPG, who will pay up to 189 million Euros for the participation. The 100% of the managing company has been valued at 310 million Euros, although this figure can vary between 250 and 370 million Euros depending on the results obtained between 2014 and 2017.

As published by Expansión on the 7th September, La Caixa, advised by Morgan Stanley, decided to sell its 51% of its real estate managing company to TPG, after discarding the offer it had received from the fund Bridgepoint. However, the savings bank presided over by Isidro Fainé has decided to sell first the 100% of Servihabitat Gestión to CaixaBank for 98 million Euros. Citi and Rothschild have taken part in the setting of this price.

As a consequence, it is the bank and not the savings bank who has signed the sale of the 51% to TPG, with an estimated gross gain of 255 million Euros, as informed by the institution to the National Share Market Association.

The gains for La Caixa are much greater and reach 317 million Euros. The profit obtained by the institution for the sale of Servihabitat Gestión to Caixabank and the proportional part it has obtained from the gain achieved by the bank is included in this figure.

But why has La Caixa decided to sell Servihabitat Gestión to CaixaBank previously? The response lies in the fact that this company manages the assets of Building Center, the real estate company of CaixaBank. “The source of the main economic value of the management of real estate assets business is located in CaixaBank”, the institution stressed yesterday. In this sense, the bank will transfer to the subsidiary now controlled by TPG the exclusive commercialization of all its properties for a period of ten years. “There was a risk of CaixaBank transferring the sale of its assets to another institution if the bank was not directly involved in the operation”, the consulted sources point out.

Servihabitat Gestión is a demerger of Servihabitat XX!, the real estate company owned by la Caixa where the institution located all its properties awarded before February 2011. Two and a half years later, there are less and less properties in this company, while the number of assets in BuildingCenter is increasing tremendously after its integration in Civica.

The company of real estate services now in the hands of TPG and CaixaBank manages assets for a gross value of 22.000 million Euros, although they do not own them. The company has a staff of 250 workers and plans to invoice one hundred million Euros per year thanks to the commission of the sales and rentals of the properties, estimated in 3.000 million Euros per year.

Advised by Clifford Chance, the group TPG has carried out the purchase through TPG Special Situation Partners (TSSP), which has 55.300 million dollars in assets under management.

CaixaBank sells its real estate división Servihabitat to TPG for 185 million Euros.

Another real estate company from a great bank ends up in the hands of the venture capital firm. As done by CaixaCatalunya in August and Bankia this week, La Caixa has reached an agreement with Texas Pacific Group (TPG) to sell 51% of the capital of Servihabitat Gestión Inmobiliaria, the company that had gathered most of the assets awarded after the non-payments in the construction business.

The agreed price is 185 million Euros, as the company is valued at 370 million Euros. This is therefore a price that doubles the one obtained by Bankia when getting rid of its bad bank (90 million Euros) and multiplies by nearly five the 40 million Euros obtained by the other Catalan bank in the hands of the State.

Nevertheless, this is a fairly lower price than the one initially foreseen, when La Caixa put its subsidiary on the market, as it planned to receive 200 million Euros. In any case, this is a positive operation for the group led by Isidro Fainé and Juan María Nin, which will have millionaire earnings.

The agreement between La Caixa and TPG transfers the management of the real estate services for a period of ten years, included those of the real estate company Building Center, the subsidiary where CaixaBank accumulates all assignments in payment that entered its balance sheet after going public. The bank with headquarters in Barcelona will liberate resources for the sale and rental of homes, the installments linked to properties, the foreclosures and the recovery.

Texas Pacific Group, a fund of 54.000 million dollars advised in Spain by a former executive of Bankia, Fernando Magnet, has won Bridgepoint, which has been fighting until the last moment, on the bid for Servihabitat.

Other funds such as Fortress and Starwood, also participated in the auction, as they were interested in a very interesting recurring business as the flow of operations is guaranteed, regardless of Servihabitat or Building Center carrying out operations with capital losses, as usually happens in the current market situation.

The sale takes place after La Caixa segregated the company Servihabitat Gestión from the group Servihabitat at the beginning of this year, a subsidiary where the savings bank had located all the real estate assets included in its balance sheet before CaixaBank went public. This division changed Servihabitat into its own bad bank, where it gathered awarded properties and land in order to be able to place the financial business on the market without having to cope with the burden of the construction business.

La Caixa has not been able to finalize the sale of 12.000 properties, an operation that ran parallel with the Servihabitat one. The decision was taken after receiving binding offers for 800 million Euros, half of the valuation made by the bank on that portfolio of properties. (…)

Sareb auctions its first great lot of toxic assets between Lone Star, Centerbridge and TPG.

On the next 18th July, Sareb will award the sale of the first great lot of toxic assets to an international investment fund. Two weeks ago, those interested in participating in the Operation Bull, code name for this process, presented their binding offers, as confirmed by financial sources. In total, the bad bank has received  proposals from the giants Lone Star, Centerbridge and Texas Pacific Group (TPG), although there are other firms such as Cerberus and Colony Capital.

Everyone in the market considers that Lone Star is the favorite candidate to win the bid for several reasons. The main one is its capacity to present the tightest price, as it knows better than anyone the profile of the assets on sale, as it studied its acquisition from Bankia before they were transferred to Sareb.  Since then, it has monitored their evolution within the bad bank, being even ready to propose their acquisition without a competitive process, as finally decided by the team lead by Belén Romana.

Precisely this decision has complicated the execution of the Operation Bull. The election of KPMG to carry out a competitive process generated a lot of noise among the six international investors that hope to split up the main lots of assets that Sareb will sell. In the end, the same funds that studied the possibility of participating in the capital of the bad bank-Fortress, GE Capital- are the ones that will now buy the properties directly, without entering the strict shareholding structure imposed by the Banking Restructuring Fund.

Any result other than the victory of Lone Star would be a surprise. As explained by one of its rivals, the Texan firm – with headquarters in Dallas, has hired the main real estate consulting firms in the market – Knight Frank, Aguirre Newman and Jones Lang LaSalle, except CB Richard Ellis, in conflict after advising Sareb – to study its offer and, at the same time, to stay out of the reach of its rivals. Also, it is the investor that has spent more resources in audit and viability processes in order to classify the assets on sale.

Something similar happened with the sale of assets carried out by the Municipal Company of Housing and Land (MCHL) of the Council of Madrid, although in the end the buyer has been a different one. Before opening the bidding process, the municipal company negotiated individually with Lone Star in order to model a portfolio that fits its preferences. Once this phase was completed, however, the MCHL carried out a bidding process attended by most of the funds installed in Spain that hope to have a piece of the confiscation process that is taking place there.

While the date for the decision approaches, all investment funds specialized in the acquisition of toxic assets, those who are participating and those who are not, work hoping to be able to bid for the portfolios of properties (Bull 2, Bull 2…) that Sareb is carrying out. This calendar, however, depends on the working rhythm needed by the bad bank to complete the audit of the 180.000 real estate assets, from land to unfinished developments, which are part of its stock. This should theoretically be ready in August.

After this date Sareb will start the sale of its great portfolios of properties, with the intention of reaching the 1500 million Euros included in their business plan for this year. The team of the bad bank, which works at a frantic pace to comply with the requirements established by Brussels, is not too happy with the complaints on their work. (…)

Source: El Confidencial

The vulture funds that fly over the Spanish construction sector.

There is a business in the bruised Spanish real estate sector. In the last few months, the real estate subsidiaries of the nationalized savings banks, some of the assets that have been transferred to Sareb and “packages” of properties of those banks that have not been rescued will change hands. The buyers will be ten foreign companies, known as vulture funds, specialized in acquiring real estate bargains, as they have done in other countries.

Their names, Apollo, Cerberus, Lone Star, Lindorff…..where do they come from? Who are they? What will they do with the properties they sell? Most of them have a U.S. and British capital and are related to businessmen who are more or less known in Spain, such as the tycoon Donald Trump, the former vice president of U.S.A. Dan Quayle, the former Secretary of the Treasury of U.S.A., John W. Snow or the Mexican Carlos Slim.

The game is on. In November one of them, Centerbridge took the first step and acquired the awarded properties from Banesto (mostly second hand ones). Now it´s the turn of La Caixa, who appointed an investment bank for the sale of Servihabitat; Bankia has just received offers for its subsidiary Bankia Habitat. Catalunya Banc also studies who will get its real estate subsidiary Catalunya Caixa Inmobiliaria, and Novagalicia Banco has also ten offers on the table.

These are the vulture funds who aspire to dominate the Spanish real estate market in the next few years:

Apollo Global Management

The U.S. company is one of the main investment businesses on a global scale specialized in operations related to the acquisition of credits, real estate investments and the “private equity”. It was founded in 1990 by the Jewish businessman Leon Black, who acquired in 2012 one of the four versions of “The cry”, by Munch, for nearly 120 million Dollars (92 million Euros), the firm also has a subsidiary focused on the real estate operations.

In Spain, the Apollo group acquired the platform Finanmadrid from Bankia for 1,6 million Euros. The real estate subsidiary of this company, Apollo Real Estate is one of the main candidates to acquire CX Inmobiliaria from Catalunya Bank.

Cerberus Capital Management L.P.

With its headquarters in New York, Cerberus is one of the main investment companies in the world. It is presided over by two heavy weights U.S. Republicans: The former vice president in the USA during the presidency of George Bush Sr., Dan Quayle, and the Secretary of the Treasury between 2003 and 2006 during the presidency of George W. Bush, John W. Snow.

The acquisition of default credits from Banco Santander for 350 million Euros in April 2012 is the most important operation in Spain until now. The company has been positioning itself as one of the funds with more relevance in the acquisition of default assets, having acquired several packages of credits and properties from Bankia. Cerberus hired the son of former president José María Aznar at the beginning of the year with the intention of receiving counseling on the possible acquisition of assets from the “bad bank”.

Lone Star Funds

The Texan investment funds Lone Star are another of the potential buyers of assets of the Spanish “bad banks”. In 2012, the company acquired default credits of the Banco Santander for 150 million Euros and at the end of that year opened its own platform for credit recovery with the former manager of Apollo in Spain, Luis Cebrián.

These investment funds manage a total business volume focused on making capital added obligations more profitable with a volume of 33 bilion American dollars (25352 million Euros). One of its more important operations was the acquisition of 90,8% of the shares of the semipublic bank IBK which was affected by the subprime crisis.

D.E. Shaw & Co

Founded in 1998 by the scientist specialized in computer studies David E. Shaw, this investment and technological development company has its headquarters in New York. According to the figures of the company in April 2013, the company has an investment capital of 30 billion dollars (25.345 million Euros) and branches in the United States, Europe and Asia.

In the United States, this company is one of the main economic agents specialized in investment funds of security of mortgages that do not have the backing of the government. D.E. Shaw is also one of the main investors in pension funds in the city of New York.

Lindorff

The Norwegian company Lindorff is present in 11 European countries and has a business core specialized in the collection of debts. This company owns the companies Aitor and Investor AB at 50% each.

Lindorff has already carried out several businesses with Spanish financial institutions. We can highlight the acquisition of the platform of recovery management Reintegra from Banco Santander and the bid they are currently carrying out for the acquisition of default credits of NCG.

Aktiv Kapital

This Norwegian company  specialized in the acquisition of toxic assets at bargain prices was founded in 1991 in Oslo and currently operates in eight European countries and in Canada.

Aktiv Kapital has worked with the group BFA-Bankia in two occasions in 2012. It acquired around 100.000 default credits for consumers and another portfolio related to default credits in the car industry made of 16000 agreements and valued at 126 million Euros.

Oaktree Capital Group LLC

Founded in 1995, the company Oaktree has a staff of 600 employees mainly made of financial executives. It is among the 25 main investment management companies specialized in alternative assets such as the venture capital. It also has a real estate subsidiary called Oak Tree Reality that operates in the U.S. Its president, Howard S. Marks is considered one of the main authorities in Wall Street and according to the Forbes magazine is one of the richest financiers in the world.

In Spain, Oaktree is the main individual creditor of the company Panrico thanks to the acquisition of 20% of its debt and is the main shareholder from the company Campofrío.

TPG

TPG, previously Texas Pacific Group is one of the main financial investment groups in the world with its headquarters in California and Texas. Its business activity ranges from telecommunications to travel, the technological and industrial sectors, health services and banks.

One of their main operations was the rescue of Bradford and Bingley, the greatest mortgage bank in the United Kingdom, after the acquisition of 20% of its capital. This group also negotiated with the owners of Iberia in order to take on the control of the company.

WL Ross & Co. LLC

Lead by the millionaire Wilbur Ross, WL Ross & Co. LLC is an investment company specialized in taking over companies with financial problems with the aim of restructuring them. Energy, financial services, health services, heavy materials and transport are the main areas where this tycoon develops his business, with a fortune around 2,6 billion Dollars (1996 million Euros) according to the Forbes magazine.

This American millionaire who declares “his love for mortgages” which bring him a lucrative business in the States has winked at the “bad bank” and declares that Spain “is, in many ways, a very interesting country”.

Fortress Investment Group LLC

Founded in 1998, this company specialized in investments develops its activity in different sectors that range from the real estate sector, with a subsidiary specialized in castles, to the financial sector, energy or infrastructures.

In 2012, Fortress acquired a package of aprox. 1000 million Euros in default credits from Santander, most of which were consumer credits.

Centerbridge Partners

Centerbridge is a multistrategic investment company with more than 15 billion dollars (11523 million Euros in assets. Its headquarters are in New York and it has branches in London.

Centerbridge Partners acquired at the end of 2012 Aktúa, the subsidiary from Banesto specialized in management and recovery of credit portfolios, for around 100 million Euros.

Donald Trump

The eccentric millionaire Donald Trump is another candidate to acquire a great number of Spanish properties. Its name sounds among the potential investors that could arrive to our country after he declared in 2012 that in Spain “they were giving land for nothing” and that as “country was ill, it was the time to take advantage of that”.

Carlos Slim

The richest man on earth for the fourth year in a row according to Forbes magazine, bought through its Mexican real estate subsidiary, Carso, properties from Caixabank for 428,2 million Euros.

The 439 properties acquired by Slim are intended for bank branches and the operation was a “sale and lease back” as after the sale, a long term lease with a purchase option was signed, which allows Caixabank to continue using the sold branches.

Otto Group/EOS Group

The German group Otto with more than 50000 employees and presence in Europe, America and Asia is one of the firm candidates to take a big piece of the Spanish real estate market.

Through its subsidiary EOS Group, Otto acquired at the beginning of 2013 the recovery business from Banco Popular for ten years and 135 million Euros.

Source: El Mundo