Cerberus Capital Management agreed to buy a portfolio of mortgage loans and other loan assets from UK Asset Resolution Ltd and the issued share capital of NRAM, the former Northern Rock mortgage business. The total portfolio is valued at about 13 billion pounds ($19.7 billion).
Cerberus Capital Management, L.P. (“Cerberus”) today announced that affiliates of the firm have entered into a definitive agreement to acquire a portfolio of mortgage loans and other loan assets from UK Asset Resolution Limited (UKAR) and the entire issued share capital of NRAM plc. The £13 billion portfolio acquired by Cerberus includes approximately £12 billion of loans in the securitization vehicle known as Granite and other legacy mortgages of NRAM plc, the former Northern Rock mortgage business.
The highly competitive bidding process for the portfolio was conducted by UKAR and approved by UK Financial Investments Ltd (UKFI) and HM Treasury. The terms and conditions of the existing loan agreements will remain unchanged and Cerberus has engaged UKAR’s mortgage servicing arm to continue to service the loans, ensuring continuity in service for borrowers. This investment follows Cerberus’s acquisition of Capital Home Loans Limited, a regulated specialist Buy to Let mortgage lender, that completed in July 2015.
“Cerberus is pleased that, after a lengthy and thorough process, UK Asset Resolution Limited selected Cerberus as the acquirer of this significant portfolio of mortgage loans,” said John W. Snow, Chairman of Cerberus Capital Management. “Cerberus prides itself on having earned the trust of financial institutions and regulators across Europe, who recognize our expertise and significant experience in responsibly managing loan portfolios. Cerberus is committed to being good stewards of these assets, and to ensuring that borrowers continue to receive exemplary service and care. This portfolio is an important addition for Cerberus and further demonstrates our commitment to our European mortgage and real estate investment strategy.”
Cerberus has been an active investor in performing and non-performing real estate loans for more than 20 years and has established a track record globally for professional, responsible management of such assets. The firm has been named by Cushman & Wakefield (C&W) as the leading investor in European loans the past two years in succession. Cerberus affiliates have acquired and successfully worked through loan portfolios and lending platforms across Europe, including transactions in the United Kingdom, Germany, Spain, Italy, Ireland, and Denmark.
Cerberus was advised by Morgan Stanley & Co. International plc in respect of this acquisition.
About Cerberus Capital Management, L.P.
Established in 1992, Cerberus Capital Management, L.P. is one of the world’s leading private investment firms. Cerberus has more than US $28 billion under management invested in four primary strategies: private equity; real estate-related investments commercial mid-market lending, and distressed securities & assets. From its headquarters in New York City and large network of affiliate and advisory offices in the US, Europe and Asia, Cerberus has the on-the-ground presence to invest in multiple sectors, through multiple investment strategies in countries around the world.