SEE to remain distressed for 2-3 years
With some EUR 900 mln already under management, and taking an equity position of over EUR 20 mln each time, the company’s founders aim to raise their asset strength and someday reach the level of the clients they serve.
“This region will continue to remain distressed for the next 2-3 years,” said Savvas Liasis, partner in the firm and chairman of the award-winning affiliate Alpen Invest.
“Usually we get the mandate from the owners themselves, who are either in a difficult situation or need fresh capital to grow. We would normally take an equity position for 3-5 years, usually for our clients that include major fund managers or fund-of-funds in western Europe and the U.S.,” Liasis said.
Potential target markets include Cyprus, Greece, Serbia, Slovenia and Croatia, he said, which are markets which are not yet saturated and where investments in non-performing loan portfolios are lucrative.
The specialised teams at Elements and the Slovenia-based Alpen Invest have helped the group position itself among the bigger international players, some whom used to be rival and now are their clients.
“Bank of America managed to outbid us on a deal we were working on for six months. Now, they are our clients,” Liasis said.
Andreas Georgallis, Chief Operations Officer at Elements, said that in most cases the owners stay on with a minority stake, while anyone from their 30-strong team, in Slovenia or the office in Cyprus, would assist to turn the company around.
In June, Elements Capital Partners, along with the USbased investment fund York Capital Management LLC, finalised the purchase of receivables (and obligations) against Istrabenz, one of the largest holding companies in Slovenia, of approximately EUR 46.7 mln from BAWAG, and banks belonging to the Erste Group.
Istrabenz is a strategic holding company, with its shares listed on the Ljubljana Stock Exchange since 1997. The core activity of the holding is investment management (strategic and portfolio). The purchased amount of claims represented 34% of Istrabenz’s overall restructured financial debt.
“The purchase of receivables from Istrabenz will enable us to expand our expertise into the fields of tourism and energy, two sectors also crucial to the Cypriot economy into which we are looking to expand in the near future,” said Liasis.
Speaking about receiving the award for Best Fund Management Team in South Eastern Europe from Capital Finance International, Liasis said that this confirms Alpen Invest’s position as one of the leading asset management companies in south eastern Europe. In February, Alpen Invest was declared the best Slovenian fund management company for 2014 by the country’s leading financial newspaper Moje Finance. Two of its funds – “Alpen.Emerging” and “Alpen.Developed” – also received top ratings, while the managers of the two funds were named among the top five Slovenian fund managers of the year.
“South eastern Europe is on the move, and the prospects for growth are constantly increasing. In this rapidly evolving environment, we are delighted to have positioned Alpen Invest as a reference point for investors, and to be achieving recognition for our efforts”, said Liasis.
In their report, the CFI award judges in London applauded Alpen Invest – under Cypriot control since 2014 – for putting place a number of comprehensive processes that “ensure risk profiles are properly managed at all times”, and noted that the company also “closely adheres to transparent investment policies that are centred on client concerns and aspirations”. They also emphasised the company’s concern for investors, noting that Alpen Invest’s professionals “strongly believe that Slovenian companies presently being privatised are significantly undervalued and thus offer excellent short and medium term upward potential”. This year’s award winners included German pharma Bayer, HSBC, PwC, and Baker & McKenzie consulting firms and MetLife Insurance.