Winner: Cerberus Capital Management
In recognition of its resources, relationships and scale, Cerberus Capital Management has won the Investor of the Year category in SCI’s NPL Securitisation Awards. The firm has garnered significant industry acclaim for helping financial institutions address large non-performing loan portfolios as a long-term strategic partner.
One standout example during the awards period is the sale by Alpha Bank Group of a €2.4bn portfolio of Cypriot NPLs and real estate properties to a Cerberus affiliate in February 2022. Dubbed Project Sky, the transaction represents the largest NPL sale by a Greek bank outside of the HAPS government guarantee scheme. The sale enabled Alpha Bank – which was advised on the transaction by Alantra – to reduce its non-performing exposure ratio by approximately five percentage points to circa 13%.
Cerberus’ global NPL platform has invested approximately US$21.3bn in equity in more than 246 NPL transactions with total transaction values of approximately US$72bn since 1998. The firm has NPL investment experience in 23 countries and its NPL portfolios comprise a diverse spectrum of loans, including SME and other corporate loans, real estate secured loans, loans secured by assets other than real estate, unsecured loans and consumer loans.
The Cerberus NPL platform consists of 50 experienced investment professionals with a track record spanning 25 years. This integrated team works across all stages of an investment’s lifecycle, from sourcing and due diligence during the acquisition process, to monitoring of investments throughout the holding period and monetisation process.
Together with such investment expertise, what gives Cerberus an edge in the NPL market is significant infrastructure and servicing platforms with scale. The former enables the firm to source, screen, underwrite, finance, migrate, service and ultimately monetise thousands of borrowers, loans and assets across multiple geographies.
Meanwhile, Cerberus deems servicing oversight as essential to underwriting and managing NPL portfolios. Cerberus-owned proprietary service providers, along with third-party servicing partners in local jurisdictions, collectively employ over 1,500 full-time employees that service more than two million loans.
In particular, Cerberus European Servicing (CES) is the firm’s in-house servicing platform, which provides what it describes as a “proprietary edge” in terms of investing in European loans and asset portfolios. With offices in London, Amsterdam, Dublin, Frankfurt, Lisbon and Madrid, the platform oversees third-party servicers and operating partners to support Cerberus’ acquisitions and execute its underwritten business plans.
“By utilising both internal and external resources, Cerberus is able to establish robust loan servicing practices with local and regional expertise. We believe our commitment to best-in-class servicing has been a crucial component of our ability to be a trusted partner for Europe’s leading financial institutions,” the firm states.
Overall, the close integration of sourcing, underwriting, valuation and active asset management helps Cerberus execute large and complex purchases of NPLs and REO portfolios. Such an approach has resulted in repeat transactions with a number of large global financial institutions.