New Duff & Phelps, Situs venture targets Irish loan portfolios

Loan servicer Situs and corporate financial advisor Duff & Phelps are targeting Ireland’s distressed loans portfolio market through a newly-formed joint venture.

The new business will offer ‘end-to-end’ loan management services for commercial property investors in the Irish market, where the joint venture expects the continued disposition of large portfolios.

Services will include valuation, due diligence, bid management and loan performance analysis through to asset management, borrower risk reviews, and disposal and enforcement strategies.

“The Irish banks have been deleveraging for the past few years and that’s going to be continuing,” said Brendan Hanratty, associate director at Duff & Phelps, noting that the joint venture expects continued sales activity from the National Asset Management Agency, the Irish bad bank created in response to the Irish financial crisis in late 2009.

“NAMA’s Project Arrow is on the block at the moment. That’s about €8bn in par value, and there are a number of other sales like that due from NAMA over the next 12 to 18 months,” he said.

NAMA has overseen portfolio sales worth around €15bn to date with Deutsche Bank and private equity firms Blackstone, Oaktree Capital and Cerberus Capital Management among the successful bidders.

“A lot of these funds have acquired quite large loan books, so obviously there will be a secondary market coming after the initial sales as well,” Hanratty said.

There is no set lifespan for the joint venture, but its progress would be evaluated after the first year.

“The partnership with Duff & Phelps will offer a complete solution to acquirers and holders of real estate debt looking for support in the Irish market,” added Brian Donohoe, director of Situs. “As the European market aggressively addresses loans in this area, the timing for this partnership could not be better.”

Both Situs and Duff & Phelps are owned by US private equity firm Stone Point Capital.