Bain plants flag in Italian RE market with HETA acquisition

Bain Capital Credit has planted its flag in the Italian real estate debt market with the acquisition of lender Heta Asset Resolution Italia, a manager of distressed loans, according to Real Estate Capital’s sister title Private Debt Investor.

The purchase is part of its plan to scale its services in the country with a view to potentially originating loans in the long-term future.

The transaction was announced last summer but was finalised yesterday following regulatory approval from the Bank of Italy. Heta is a bad bank established by the Austrian government to wind-down the non-performing loans on the balance sheets of Hypo Alpe Adria, now known as Harit.

Harit, a real estate leasing business, employs 90 people within the country. Under the terms of the agreement, Bain will acquire loans with a gross book value of €570 million. The portfolio includes assets within their leases, non-performing loans and repossessed assets. Leases have been provided to corporates, including retailers, logistics centres, industrial warehouses and hotels.

Fabio Longo, a managing director at Bain Capital Credit, said that it is an exciting time to be in Italy because there has been a series of announcements from the banks that they are to begin unloading their non-performing assets. “We like the infrastructure of Heta – it’s experienced management team and the geographic concentration of the platform.”

“It is merely a starting point for our ambitions. The backbone of the platform, which includes the reporting and compliance team, will help us achieve scale,” he added.
Longo said that the initial plan is to purchase a number of the under-performing assets burdening Italy’s leading financial institutions, estimated to be worth approximately €200 billion, but potentially to moving on to originating loans within the country itself.

“We are open-minded to buying underperforming loans and may explore the potential for origination, as we have been successful in providing innovative financing solutions to borrowers in Ireland. The platform has a team that can originate contracts and can begin with providing refinancings. Over time, depending on how the market evolves, we will be interested in exploring the opportunity to originate new loans,” he said.

“For the time being our main focus is buying non-core assets from financial institutions that are looking to reduce their exposure,” he concluded.

EY served as financial adviser to Bain, while law firms Linklaters and Wolf Theiss Rechtsanwalter worked as legal and tax advisors on the acquisition.