Starwood Property Trust is in talks to sell its loan servicing business Hatfield Philips International to rival Situs.
If completed, the deal would add 355 loans totalling £11.3bn to Situs’s European portfolio.
Led by London-based chief executive Blair Lewis (pictured), Hatfield’s focus has historically been CMBS special servicing, but as the market has recovered this business has been shrinking because fewer loans have been distressed.
With primary loan servicing a low-margin business, in recent years Hatfield has been trying to shift its focus towards non-performing loan management and acquisition and helping investors raise fresh debt.
Last year, it provided advisory services on 32 non-performing loan deals valued at $35.1bn (£26.6bn) in total. It also closed its first two loan transactions totalling $35.3m.
For Situs, a merger would create economies of scale by combining the management of its €24bn (£20bn) of European real estate loans of which it is the primary servicer with the Hatfield portfolio.
Starwood bought Hatfield in 2012 as part of its acquisition of Hatfield’s parent LNR in 2012, which owned a portfolio of debt positions itself. It was expected at the time that Starwood would undertake a quick sale of Hatfield, which was seen as more peripheral than the rest of LNR but Starwood decided to hold on to the business for longer while it repositioned itself.
Hatfield’s key personnel
● Blair Lewis, chief executive
● Willhelm Hammel, head of NPL advisory
● Rupert Gill, managing director, head of debt advisory and transaction management
● Gunther Kotz, director of special servicing
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