M7 Real Estate and Mount Street have formed a joint venture focused on the non-performing loan portfolio market.
The joint venture, Mount Seven, aims to combine M7’s asset management and asset underwriting skills with Mount Street’s loan servicing expertise. The business will also co-invest alongside its clients.
The business has already secured its first mandate and “expects to play a major role in the various upcoming sales across Europe”.
According to Cushman & Wakefield, European banks and asset management agencies still have €531bn (£372bn) of non-core real estate loans on their books which they are looking to dispose of. Some €44.6bn of loans were sold in the first nine months of this year.
M7 has extensive coverage in Europe, with offices in London, Lisbon, Prague, Warsaw, Paris, Frankfurt, Copenhagen, Glasgow, Paris and Amsterdam. It manages €1.7bn of assets totalling 35m sq ft.
Mount Street has offices in London and Frankfurt but services loans totaling €25bn across 14 European countries.
Bill Sexton, managing partner at Mount Street, said: “The tie-up with M7 is a logical step as we continue to enhance our offering to investors in the NPL arena. There are few operating partners that are able to underwrite both the assets and the loans, let alone service both parts of the NPL equation post-acquisition.”
M7 chief executive Richard Croft added: “The teams have worked together already on a couple of loan underwrites and the combination of the two skill sets really does offer a unique and compelling service to investors in this space.”
Croft and Sexton have a long-standing relationship, having both been co-founders of fund management business Halverton a decade ago prior to its sale to Australian company GPT in 2007.
