M7 Real Estate and Mount Street Loan Solutions have formed a new joint venture to act as a co-investor and operating partner in European non-performing loan deals.
The vehicle, Mount Seven, has signed heads of terms with an unidentified investor on an existing NPL portfolio sale. The JV is also seeking out future European NPL opportunities.
Mount Seven is intended to combine loan servicing operations, the mainstay of Mount Street, with the asset management and underwriting skills of M7, in order to provide NPL investors with a single operating partner.
Paul Lloyd, managing partner and head of servicing at Mount Street, told Real Estate Capital that the new platform is intended to provide investors with an operating partner which can provide loan servicing, underwriting and asset management services as well as having the ability to co-invest in a deal, should the partner require it. The level of co-investment would be dependent on the size of each individual loan purchase transaction and would be done through the joint venture platform.
“It is about making this a flexible platform in order to fit all operating partners’ requirements,” Lloyd said.
London and Frankfurt-based Mount Street services €25 billion of loans in 14 European countries. M7 Real Estate manages around €1.7 billion of assets across 10 countries.
“The teams have worked together already on a couple of loan underwrites and the combination of the two skill sets really does in our opinion offer a compelling service to investors in this space,” added M7 chief executive Richard Croft.
Debt adviser/servicer Hatfield Philips International began offering to co-invest in NPL acquistions with investors last year.