AnaCap Financial Partners, a financial services-focused private equity group, has been positioning itself to take advantage of the dislocations roiling Europe, targeting £250 million (€288.4 million; $390.6 million) for a fund that will invest in non-performing loans, including consumer credit card debt.
The second AnaCap Credit Opportunities Fund has a hard-cap of £350 million pounds, according to a person with knowledge of the fund. The firm has raised at least $101 million (£64.6 million), according to filings with the US Securities and Exchange Commission from September. SEC filings are made in US dollars.
The filing names San Francisco-based Growth Capital Services as placement agent. AnaCap declined to comment.
The fund’s focus will be on non-performing loan portfolios, some of which could be mortgage-related and some that will be portfolios of credit card debt, the person said. Consumer credit presents a good opportunity to an investor with the resources to collect the debt owed on the cards, the person said.
“Banks are bad at servicing credit card debt that isn’t performing,” the person said. “They don’t have the resources to go out and beat people down to get the money. “
Banks are bad at servicing credit card debt that isn't performing. They don't have the resources to go out and beat people down to get the money.
AnaCap buys the debt portfolios, sometimes at significant discounts to par, and “they have expertise in the servicing area to go out and get these people to pay their debt”, the person said. AnaCap has to be delicate in how it collects the debt because the banks don’t necessarily want to offend their borrowers, who might be customers of other products like mortgages, the person said.
“The bank doesn’t want to lose them as a client, so they’re sensitive to who they sell [the portfolios] to,” the person said. “Not many can do this and do it in a way where you’re buying small portfolios and the banks trust you to not [drive] their clients away from other products.”
AnaCap has debt collection capabilities through its portfolio company Apex Credit Management. The firm merged Apex with Cabot Financial earlier this year, which it acquired from Citi for a reported £90 million.
AnaCap also runs private equity funds that focus on financial services. AnaCap’s second Financial Partners fund closed in 2009 on €575 million, which doubled the size of its predecessor vehicle which closed in 2006 on €300 million.
In June, the firm completed the acquisition of retail and commercial bank Banco Popolare Ceska Republika from Italian parent Banco Popolare after 18 months of negotiations. Deal terms were not disclosed, though Private Equity International had previously reported the firm would pay about €48 million for the bank.
AnaCap was formed by Joe Giannamore, a former Goldman Sachs and Salomon Brothers banker.