Juan Barba, head of Real Estate Owned assets at La Sociedad de Gestión de Activos Procedentes de la Reestructuración Bancaria (Sareb), has said his group is looking to structure further deals in joint venture with private equity firms.
Speaking with PERE in a recorded interview at the Global Investor Forum 2013 in Amsterdam, Barba highlighted Sareb’s €100 million deal completed in August called Project Bull with Miami’s H.I.G. Capital for nearly 1,000 homes in the first such example.
In that case, Sareb made use of a special vehicle called a Bank Asset Fund (FAB) that it describes as a ‘flexible divestment tool’ inspired by securitisation funds and collective investment institutions tailored to professional investors.
Speaking of the need for investors to understand Sareb’s “needs”, Barba said he was looking for groups to invest in partnership with Sareb where the investor brought along a specialized manager and a business plan for the assets.
“It is important that investors realize it is not a sale. It is a JV. It is not just a question of pricing but of having a business plan,” he said. “That is going to be even more meaningful for the portfolios we put out into the market in 2014. Investors need to understand we are trying to create joint ventures. We are not trying to simply get rid of assets.”
It also has rental assets for sale, which has attracted Blackstone and Goldman Sachs in separate deals. “We are creating rental vehicles – portfolios of rentals in order to meet demand from investors,” said Barba.
He explained how the Real Estate Assets group had been hard at work “segmenting” the portfolio some 107,000 assets it inherited.
Sareb's entire portfolio of nearly 200,000 assets is divided into two groups: Real Estate Assets, for which Barba has responsibility, and Financial Assets being property development loans. The Real Estate assets division has 76,357 vacant homes, 6,293 rented homes and 14,859 plots of land. The overall strategy is to realise assets by selling via “retail” channels and by selling to institutional investors. The company is relying on bank branches of contributing institutions to sell to retail investors, though Barba said the company wanted to use “multiple” channels to sell.
Summing up the approach of the Real Estate Owned group’s approach, he said: “We want to hear investors and their demands. The more specific the better and we would try to put that in the market.”
A wide variety of firms have approached Sareb, from high yield funds, and private equity firms to some value added strategies. “You can see the difference. In terms of private equity, we see offers where the driver is IRR, then fast track liquidation. They are not so concerned with the multiple but with the IRR. For us that is problematic. There are some funds more concerned with the multiple, which is more aligned with our interest. We are trying to get in front of them and create a joint venture.”