doValue CEO: Investing in Greece a strategic decision

The acquisition of FPS by Italian group doValue will serve as a springboard for the latter’s expansion in the wider Southeastern Europe region according to its CEO Andrea Mangoni.

In an interview with Kathimerini, Mangoni says that the Italian group’s aim is to become the leading servicer of nonperforming exposures in Greece ahead of the emergence of the secondary NPE market.

With the introduction of the Altamira platform and know-how, the Italian group aspires to become the top servicer in the emerging market of properties that end up in the banks’ ownership, which according to doValue estimates will more than double over the next couple of years.

doValue is one of the leading NPE servicers – if not the leader – in Italy, Spain, Portugal, Cyprus and, following the agreement with Eurobank, in Greece. What is doValue’s strategy in this country?

The agreement with Eurobank is of a strategic and industrial nature. We got into the Greek market with a long-term commitment. doValue’s business is focused on servicing, with a 20-year track record and the number one position in Southern Europe.

doValue has a multi/three-pillar strategy: We are market leader in loan servicing in Italy and Spain; after the acquisition of Altamira we have strong know-how in real estate in Spain and Portugal; and in Greece FPS is a springboard for our presence in SE Europe.

During the last five years, doValue’s strategy has been to attract as customers the major banks and investors in South Europe as well as most funds active in the NPE market. The fact that we are an independent servicer with deep expertise in the field has allowed us to succeed in this effort. Among its client base doValue counts top banks including Unicredit, Santander, Intesa Sanpaolo, Credit Agricole and others, as well as major funds like Fortress, Bain Capital, Davidson Kempner and Cerberus among others.

doValue is the largest servicer in Italy for GACS securitization (a tool whereby the state provides a guarantee on the senior notes repayment in rated nonperforming loans securitization transactions) and, as you have said, the Greek Hercules Asset Protection Scheme (HAPS) has many similarities to GACS. What are your plans for FPS?

The Greek government’s decision to adopt the GACS model is a step in the right direction. Our experience from Italy confirms that the scheme has helped banks to deal with the NPE problem. I believe that HAPS will accelerate NPE resolution in Greece. Through our investment in FPS, doValue will be able to assist all Greek banks and NPE securitization investors to service these transactions.

We have been in Greece since 2018 with the Solar project and we have had a successful experience up to now thanks to Stathis Andrianakis and his team. We are aiming to make FPS Greece’s foremost loan servicer and to expand our business beyond loans to become the top real estate owned (REO) manager in Greece. The head of Altamira has already visited FPS in Greece to initiate the accelerated transfer of know-how in order to enable FPS to offer the top REO servicing platform to our Greek clients.

We believe in the prospects of the Greek market and the Greek economy. The macroeconomic developments have been positive, the economy is forecast to grow steadily over the next years, fiscal stability has been achieved and therefore an increased flow of foreign direct investment can reasonably be expected.

In this context, Greece is the most promising secondary NPE market in Europe. More specifically, the secondary NPE market will grow as portfolio disposals of around 50 billion euros have been announced and there is a backlog of some 80 billion euros. This gives us ample space to expand our business from a privileged position in terms of size and know-how.

Will doValue continue to grow its team in Greece after the FPS acquisition?

doValue highly appreciates the quality of FPS’s management team and its trained personnel. These were key factors in our decision to move forward with the FPS acquisition. I am convinced that under the leadership of Theodoros Kalantonis and Tasos Panoussis, FPS will be able to attract new customers and assets under management and expand into new business areas, such as REOs. doValue has never stopped growing and creating new employment in all geographical locations and markets where we are present. We are expanding and we will continue to expand.

After the acquisition of Altamira, doValue has been specializing in real estate management. What are doValue’s prospects for the real estate sector?

Our goal is to become the largest and most advanced company in both loan servicing and REO management across Europe.

The Greek REO market is still in a nascent phase and is expected to more than double in the next two years from 3 billion euros last year to 7.5 billion in 2021. Competition in the segment at the moment is minimal, while the recent regulatory changes, including e-auctions, have resulted in an increase in the banks’ stock of real estate assets, as until now more than seven in every 10 successful auctions have had the bank as a buyer. It is more than obvious that a specialized real estate servicer is needed to manage these assets and we see a major opportunity for expansion in this field.

In the Greek market 20 companies have already been awarded a license for managing NPEs. Who will be doValue’s main partners in Greece?

We have an initial agreement with Eurobank, which still has a 20 percent equity interest in FPS, for servicing the bank’s NPEs and NPLs – both existing and those that emerge in the future – for the next 10 years. This is a long time-frame but we are already looking forward to an ongoing relationship, which means a permanent partnership.

The Greek secondary NPE market will see the most growth in Europe in 2020 and probably further on. Of course, FPS will not limit itself to working with Eurobank but will reach out to all NPE investors. Further, building on the expertise of doValue, we will be open to doing business with all international and local investors who join in.

But, frankly, 20 servicers is a large number and one can reasonably anticipate consolidation in the sector in the future. As I said, we are number one in South Europe and the consolidation phase always creates opportunities for the major players in any market and at any time.

Do you think that the servicers’ policy will be more aggressive in the area of auctions and what will your approach be in dealing with strategic defaulters?

doValue’s strategy shows a distinct preference for consensus solutions. In this context we will be able to offer viable restructurings to debtors. Obviously, for strategic defaulters we will make full use of the legal arsenal that the revised framework in Greece provides for. Our experience from Italy and Spain shows that prompt resolution of NPEs can only be positive not only for the banking system but for the economy overall.