Bain acquires €364m Spanish real estate NPL portfolio

The Boston-headquartered investment firm has completed its fourth acquisition of NPL assets in Spain as its continues to take advantage of opportunities in southern Europe.

Bain Capital Credit has acquired a portfolio of Spanish non-performing loans (NPL) valued at €364 million as the firm continues its push into southern Europe.

“Spain is one of Europe’s most attractive markets. We see the potential for further investment in southern Europe, particularly in the real estate and NPL markets,” said Fabio Longo, managing director in Bain’s European credit division.

The loans were acquired from an unnamed Spanish institution. The package comprises of loans to hotel companies, real estate developers, retail centres and residential investments.

A representative from the firm was not available to comment further on the details of the transaction.

Bain’s latest acquisition of NPLs in Spain follows its purchase of up to €1.15 billion of underperforming assets from leading Spanish banks in August. The transaction included the acquisition of loans valued at €511 million made to commercial and residential real estate developers at various stages of bankruptcy from Grupo Cooperative Cajamar.

Another package consisting of first lien defaulted real estate loans valued at €415 million was purchased from Banco Sabadell. An additional purchase of NPLs valued at €220 million of repossessed residential and commercial units was bought from an unidentified institution.

“We are excited about the opportunity to continue to grow our position in the Spanish NPL and real estate market with these investments,” said Alon Avner, head of Bain’s European credit business, which has now completed its fourth portfolio acquisition in Spain.

Advising Bain on the latest purchase was financial advisory firm Copernicus. Aura REE, CBRE, Horwath, and Cushman and Wakefield provided assistance on real estate valuations. Law firm Allen & Overy advised on legal matters.

The firm, which rebranded its investment business from the Sankaty name last year, pushed through the €3 billion fundraising barrier on its global distressed investment fund in the summer.

Notable investors in the fund include the Pennsylvania Public School Employees’ Retirement System ($250 million) and Denver Employees Retirement Plan ($38 million), according to PDI data.

Spain has been a popular market for a number of debt funds looking to find bargains in Europe as banks continue to keep up a fast pace of loan book deleveraging. Transactions in the first half of 2016 that were either completed or close to being finalised reached €11.7 billion, according to a Deloitte report, which concluded that the “market is showing resilience despite the continued political uncertainty and the recent Brexit vote”.

These transactions are predominantly exposures to underperforming real estate assets and leading sellers over recent years include Bankia, CaixaBank and Banco Sabadell.

The accountancy firm has not yet published a report on transaction volumes in the second half of 2016, but predicted in its August report that they would likely surpass the €20 billion mark.