Sareb portfolios go to units of Cerberus, Apollo and TPG

Local loan and real estate asset management units of Cerberus, Apollo and TPG chosen to manage €41 billion in assets by Spain’s bad bank.

Spain’s bad bank, Sareb, has awarded the management of three mixed loan and real estate portfolios to three local vehicles controlled by Cerberus Capital, Apollo Global Management and TPG. The primarily residential portfolios include almost 126,000 assets worth €41.2 billion at the time of transfer to Sareb, according to a statement by the government-controlled entity.

Haya Real Estate, which is owned by Cerberus Capital, will manage 52,000 property-guaranteed loans originated by Spanish lender Bankia. Sareb paid €18 billion for the assets and Haya’s is set to sign a five-year management contract. The majority of the Haya assets, 57.1 percent, are made up of loans secured against residential real estate.

Sevihabitat, controlled by TPG, will take over 30,300 propertied and loans made by NCG, Liberbank and Bank of Valencia for a period of seven years and for which Sareb paid €9.2 billion. Of these assets, 69 percent are property assets, of which 92.9 percent is residential. Of the loans, over 50 percent is also guaranteed by residential real estate.

Altamira Asset Management is 85 percent controlled by Apollo with the remainder owned by Spanish lender Santander. It will manage 44,000 properties and developer loans, originally arranged by Catalunya Caixa, BMN and Caja3. Sareb paid €14 billion for the assets. Loans make up 43 percent of the portfolio, of which almost 60 percent were for residential real estate. Of the property assets, 91 percent is residential, according to Sareb.

The portfolios will be wound down and gradually sold by the three servicers.

The agreements will come into effect on 1 January 2015, pending final signing. The contracts are the result of a competitive tendering process.

As part of the agreement, the three servicers and a fourth, Solvia, which agreed to take over 42,900 assets which Sareb paid €7 billion for, will pay the bad bank €600 million as a guarantee that they will pursue progressive recovery and in compliance with targets, Sareb’s statement said.

Sareb is outsourcing the management of these assets to try and stimulate the market, particularly the rental market. Requirements that must be met by the new servicers include more intense loan management, closer direct contact with developers holding loans and faster proposal processing time.

The sale of the four portfolios marks the completion of Sareb’s Ibero Project, as the asset sales were dubbed. Overall, 53 percent of the assets are loans with 47 percent made up of real estate.