Certus partnered an institution (US$40Bn+ AUM) in its ~US$500MM acquisition bid

Acquisition of a stressed non-bank RE financier by a Global Alternative Investments Firm (“Investor”)

A local non-bank RE financier (“Lender”), with an AUM of ~US$0.9Bn, defaulted on its debt obligations in Sep 2019. The secured creditors (25+ creditors with an aggregate exposure of ~US$0.5Bn) took control of the Lender through a steering committee and invited bids for the platform / its assets. They received bids from five investors of which two investors (including the Certus partnered Investor) went to the final round and submitted binding bids. The competing bid won by a marginal difference.

Certus acted as the operating partner to the Investor, undertaking detailed underwriting and diligence of the Lender’s RE loan portfolio and devising a platform turnaround plan.

Few highlights:

  • We curated a Focus Portfolio for detailed grounds-up underwriting and full-scope accelerated diligence. Focus Portfolio represented 80%+ of the Lender’s loan book (by value) and consisted of 40+ projects across India from ~15 borrowers (Total: 80+ projects / 30+ borrowers)
  • Leveraging our extensive RE lending / equity underwriting experience and relationships across the RE ecosystem (including with Lender’s management, shareholders and borrowers), we acted as an extended on-ground team for the Investor
  • Certus team spearheaded project level diligence of the Focus Portfolio by identifying, appointing (on Investor’s behalf) and defining the scope of diligence basis grounds up assessment of each loan position. Diligence streams included technical (entitlements and approvals), market, legal (land title and security documentation) and financial diligence of the underlying projects
  • In the event of a successful acquisition of the platform by the Investor, Certus would take over management of the platform to implement the turnaround strategy

This situation and serious interest from credible investors are representative of the attractive risk-reward offered by wholesale RE lending business (secondaries and primary lending).

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