AnaCap in €1.9bn UniCredit NPL purchase

The UK-based financial services private equity and credit firm has bought a portfolio of NPLs from Italy’s largest banking group.

AnaCap Financial Partners, through its credit opportunities unit, has bought a €1.9 billion ($2.4 billion) portfolio of Italian non-performing loans from UniCredit. The large portfolio includes secured and unsecured credit facilities, many of which are in bankruptcy proceedings or subject to enforcement claims, said Justin Sulger, partner and head of credit at AnaCap.

The deal, the second such with UniCredit, is a completion of the process that started with AnaCap’s purchase of €700 million in nominal value loans from the Italian bank in February, added Sulger.

The high profile sale is significant as the European banking sector is expected to produce a lot more transactions of this kind.

Following the financial crisis, the banks in peripheral European countries like Ireland and Spain struggled and were forced to make bad asset disposals. But more European lenders from core countries are anticipated to be growing sources of NPL and asset disposals, said Sulger.

The European banks have a lot more assets to shed, both in the form of non-performing loans and whole business lines, said Sulger.

The pipeline of potential sales is increasing every year, and as those opportunities have emerged on the horizon, so has the private capital interested in soaking them up.

AnaCap is not fundraising for the new credit fund at the moment, said Sulger. Its last fund closed at £250 million and it has around €300 million to deploy from across its credit funds, he added.

The results of the European Central Bank’s asset quality review will not act as a trigger for a firesale of bad assets that banks have held on balance sheet for too long, continued Sulger, rather, the gradual effect of regulators and shareholders putting pressure on lenders to deal with problems, is taking effect. And five years on from the fall of Lehman Brothers, the European banks have raised enough capital and provisioned enough to bite the bullet.

UniCredit is making large in-roads into its back catalogue of soured assets. The lender has shortlisted Lone Star Funds and a consortium made up of a US asset manager, Fortress Investment Group and Italian firm Prelios.