The founders of new loan advisory business Solutus Advisors have defended the group’s abilities and impartiality as a special servicer, after criticism from Fitch Ratings.
Cheyne Capital Management appointed Solutus, set up late last year but not rated as a special servicer, to replace Hatfield Philips as special servicer on DECO 8 loans Rowan, MPH and Braeside; and DECO 11 loans CPI Retail and Wildmoor Northpoint.
The firm also replaced Capita as special servicer on Jubilee Way shopping centre and Bradford shopping centre in the Titan 2005 CT1 and Titan 2005 CT2 vehicles. The seven loans total £84m.
Fitch said the information Solutus had provided about the identity of its private equity backer was “very limited” and the firm faced “significant challenges given its small size”.
Solutus co-founder James Bannister – former co-head of servicing and asset management at Deutsche Bank, alongside his Solutus partner, Darren Davey – responded: “A key focus has been whether the CMBS controlling party investor is invested in Solutus, which it is not.
“Investors at the bottom of the securitisation structure are often controlling party investors for the purposes of moving the special servicing mandate.
“We’ve talked to a number of investors in the controlling classes, trying to build up our business. We will look at any loan size, but there is sometimes concern about whether smaller CMBS loans will get enough attention from the special servicer, or whether enough will be done at the asset level to get maximum recovery. This is something we want to address.”
Solutus is backed by a consortium of wealthy individuals through a Jersey unit trust. “They are a venture capital group that is not involved in the day-to-day business,” Bannister said. “If we need financing or have any business ideas, we approach a trustee to find out if the investor group is interested in pursuing it.”
He added: “When we set up the business we put an agreement in place with First Investments and DTZ so that if we have an urgent problem with a property, we can pick the phone up to someone and they can be on site quickly.”