Situs bolsters European business with Hatfield Philips takeover

The deal had been brewing for several months and had been well flagged by the major players involved, but loan servicing and NPL loan management firm Situs has now bought competing debt advisory group Hatfield Philips International (HPI) from parent Starwood Property Trust for an unnamed sum.

Situs now becomes the undisputed market leader in loan servicing and NPL loan management in Europe with more than €145bn in combined assets under management around the world. Starwood Property Trust, part of Starwood Capital Group, will hold on to a non-controlling minority interest in Situs.

According to Steve Powel, CEO of Situs, “The European market is a dynamic and exciting place for debt servicers currently as banks continue to deleverage their balance sheets amidst regulatory pressure, and new market entrants rush to deploy equity and debt products into Europe. The acquisition of HPI is another milestone in our ongoing European expansion, and expands our professional capabilities in the performing and non-performing debt space now across sixteen European jurisdictions.”

“Joining Situs allows us to be a part of something special,” said Blair Lewis, CEO of HPI. “HPI brings a premier platform of seasoned real estate underwriters and workout specialists to Situs’ market leading offerings."

In Europe specifically, Situs in 2009 acquired Merrill Lynch and Ocwen’s NPL special servicing business HQ in Germany, with €1.45 billion in NPLs and assets managed across Europe. In 2011 Situs created a joint venture with HSH Nordbank to manage over €3.2 billion of commercial real estate loans in the Nordics, and in 2012 purchased Deutsche Bank’s Pan-European loan servicing and asset management business.

The Houston-headquarted Situs itself was acquired last year by private equity group Stone Point Capital LLC, while Starwood acquired HPI through its 2013 takeover of LNR Property LLC for about €1.1bn.

Founded in 1997, HPI has a team of 110 specialists operating out of London, Frankfurt and Madrid. Over the last five years, the company has underwritten 72 NPL deals with about Stg£65.4 billion in UPB secured across 59,908 assets and 102,193 loans across 32 jurisdictions, which HPI says represents coverage of about 40% of deals that went to market.

Since its foundation, HPI has primary serviced more than Stg£75bn and won the special service mandate on more than €40bn of loans. Over the last 6 years it resolved more than Stg£10bn of distressed loans at a 90%+ recovery rate, HPI says.

Volker Oehls, managing director of Situs in Frankfurt, commented to REFIRE on the new perspectives offered by the takeover of HPI. "With the combined experience of our teams, Situs has now an even stronger position in its core areas of expertise – primary and special servicing, debt acquisition advisory and loan brokerage on behalf of commercial and mortgage banks across Europe", he said.