George Soros has entered the bidding for Catalunya Bank’s €6.5bn Hercules portfolio of loans, according to Spanish newspaper Expansion. He has teamed up with alternative investment manager Varde Partners.
The bulk of the 111,000 loans are on residential property, mostly in Catalonia; 43% are non-performing and 15% are sub-performing: in default for less than 90 days.
Soros and Varde join four other bidders for Hercules: Apollo/Centrebridge; Pimco/Marathon; Oaktree, Deutsche Bank/Finsolutia; Cerebus/Goldman Sachs and Blackstone/TPG. The offers are reported to be in the €3-3.5bn range, with Soros’ among the more attractive. Binding offers are due June 30.
All the bidders have established real estate servicing platforms in Spain. Last year, Varde and Kennedy Wilson acquired Banco Popular’s servicing company Aliseda for around €800m, while Blackstone paid €40m for Cataluyna Bank’s real estate management arm, CataluynaCaixa Inmobiliaria. The latter will be run by Magic Real Estate, which already manages Blackstone’s Spanish assets. Cerberus owns Bankia Habitat, TPG has a 51% stake in La Caixa’s ServiHabitat, and earlier this year Santander sold an 85% stake in its real estate unit to Apollo.