CarVal takes on Pepper to manage new loan portfolio
THE US buyer of €380m of former Bank of Scotland Ireland (BoSI) loans has hired financial newcomer Pepper to manage the assets.
Australian-owned Pepper arrived in Ireland last year when it bought GE's €600m book of 3,500 Irish subprime mortgages, at a steep discount to face value.
Now, Pepper has been hired by US-based CarVal Investors to manage the €380m of commercial property loans it bought for a price of 25c in the euro last month. CarVal bought the "Project Pittsburgh" loan portfolio from BoSI owner Lloyds Bank, which is shedding its Irish assets and has pulled out of the market here. The deal is Pepper's first move into commercial property here.
Under the terms of the agreement, Pepper is buying a €3m stake in the portfolio – so that it has "skin in the game" of the portfolio it will manage.
Arrow Asset Management, an Irish commercial property manager, will help manage the assets.
Pepper employs 150 people at offices in Shannon and Dublin mainly involved in managing the existing book of mortgages.
The company has indicated it could start issuing new "prime" or good-quality mortgages in Ireland as it becomes more established.
In Australia, Pepper is the largest non-bank residential mortgage lender, and also manages or "services" loans for other lenders.