Mount Street in €29bn AUM boost after subsidiary deal with EAA
Mount Street has agreed a deal with Erste Abwicklungsanstalt (EAA) to acquire its management subsidiary EAA Portfolio Advisors (EPA).
Mount Street will take over EPA, including its 90 employees at offices in London, Düsseldorf, New York and Madrid, following regulatory approval, the firms said in a statement announcing the deal, earlier today. The firms did not disclose any further financial details of the transaction which, it said, is expected to be given the rubber stamp by the regulator in the first half of 2017.
With €29bn in asset sunder management, the acquisition of this platform transfer and management contract is the largest of its kind ever completed in Europe. The deal with Mount Street by EAA comes after “a rigorous selection process spanning more than six months” as the company looked for the best fit for management of its €29bn diversified performing and non-performing credits funds.
The €29bn will be added to approximately €26bn of commercial real estate loans and bonds that Mount Street currently manages, bringing its new total AUM to over €55bn.
The addition of EPA’s credit portfolio management team to the Mount Street platform will also allow the company to diversify its product offer beyond its existing activities in loan and bond servicing, according to Ravi Joseph, CEO and co-founder, of Mount Street. “For the leadership of Mount Street, who have extensive prior experience in credit, asset finance, and structured finance, this expansion is a natural progression in the evolution of our firm,” said Joseph.
At the end of 2009, EAA was created as the asset management company to manage the assets of the former WestLB AG.
EAA was founded as a public law agency under the German Financial Market Stabilisation Fund Act. Its shareholders include the German State of North-Rhine Westphalia and NRW’s savings banks associations. EAA took over the responsibility for the wind-down of WestLB’s portfolio of more than €200bn comprising a diverse range of complex non-performing loans, ABS, leveraged credit, asset finance and structured finance assets.
EPA has managed this portfolio over the past 7 years and has enabled EAA to reduce the outstanding balance to approximately €29bn, remaining ahead of the plan agreed with EAA and its stakeholders, the statement said.