UK financial service provider Mount Street has purchased portfolio manager EAA Portfolio Advisers (EPA) from Erste Abwicklungsanstalt (EAA), the bad bank created to house the assets of WestLB.
The deal includes a contract to manage a €29 bn multi asset-class portfolio for EAA, which, according to media reports, includes €3-€4 bn in US and European commercial property and commercial mortgage backed securities (CMBS). Post-acquisition, EPA will remain a separate company providing tailored services for the EAA portfolio until at least 2020.
Mount Street's takeover inludes EPA's 90 employees at offices in London, Düsseldorf, New York and Madrid.
'The privatisation of EPA secures the capacities and expertise we will need in the coming years to continue winding-down the EAA portfolio successfully,' says managing board spokesman Matthias Wargers. 'The purchaser Mount Street has many years of experience in servicing international portfolios with a focus on real estate and structured credit. The acquisition of EPA is in line with the group's aim to further expand its existing product spectrum and network of locations with EPA playing an integral role in achieving this.'
'The sale to an internationally experienced financial service provider will give EPA's employees a new perspective and thus help maintain the expertise on all aspects of the EAA portfolio. Additionally, EAA can benefit from the know-how of Mount Street Group for its own work,' added Wargers.
In a press release, EAA also said that the sale would allow it to benefit from 'increased flexibility for the remaining wind-down by turning fixed costs into variable costs that can be adapted to EAA's actual needs and progress made with regard to the portfolio wind-down'.
EAA founded EPA in 2014, taking on employees from its former service providers Portigon AG and Portigon Financial Services respectively.
'Now, however, EPA needs a perspective for the future to be able to continue guaranteeing the necessary quality in managing, evaluating and analysing the EAA portfolio. EAA's tasks as a winding-up agency require a permanent optimisation of organisational and cost structures,' Wargers explained.
To date, EAA has already reduced its portfolio by about 80% and undertaking new business under the EAA umbrella is prohibited.
The transaction is yet to be approved by the relevant regulatory authorities and closing is expected in the first half of 2017.
