Capmark Financial Group is to sell its Japanese loan servicing business, Premier Asset Management (PAM), to New York-based investment firm, Elliott Management, in the latest in the unravelling of the stricken US real estate lender.
According to a report by Reuters today, Capmark is selling the business for $38m after Elliott outbid rival bidders including London-based Sandringham Capital Partners among others.
Sandringham was previously set to purchase PAM but US rules stating the seller must find the highest bid enabled rival offers to enter the fray. According to documents seen by Reuters, Elliott’s bid matched Sandringham’s, however it could offer stronger financial guarantees for the purchase, which put the bid ahead.
The sale is the latest in a series of divestments and departures at the lender this year. It filed for Chapter 11 bankruptcy protection in October having become one of the largest names to have fallen foul of plummeting real estate values in the US.
Its failure is expected to result in losses of more than $2 billion for its investors, which include private equity firm Kohlberg Kravis Roberts and investment bank Goldman Sachs.
Capmark is selling its North American mortgage business to Warren Buffett’s Berkshire Hathaway and the holding company Leucadia National Corporation for $515 million, after getting state approval to do so in November.
The lender has also lost a debt team from its Capmark Investments arm comprising Jaqueline Brady, Margaret Blakely, Brent Morris and five others to Urdang Capital Management in October.