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.
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