A fund managed by New York-based investment manager Apollo Global Management, LLC (APO) completed the acquisition of 85% stake in Altamira – Banco Santander, S.A.’s (SAN) real-estate servicing unit. Apollo Global shelled out a sum of €664 million ($903 million) for the deal.
Banco Santander declared that the sale of Altamira would result in gross capital gain of €550 million or €385 million after tax. Altamira, which manages foreclosed assets and handles loan recoveries in Spain was put for sale by Banco Santander toward the end of Nov 2013.
However, even after completion of the deal, Banco Santander will keep the assets managed by Altamira on its balance sheet. Additionally, Altamira would continue to service them under Apollo's ownership.
The prospect of relatively high returns from the Spanish economy, which is commendably recovering from the recession and the collapse of the housing market, will likely boost investors’ sentiment. Private equity firms believe that by the purchase of property management businesses (to handle portfolios) will now facilitate them to convince banks to sell real estate loans and bad debts. This will benefit banks by enabling them to dispose troubled loans and will aid recovery of the Spanish economy as well.
Apollo is one among the many foreign investors flocking to Spain in recent times. Notably, last year, the company agreed to buy Evo Banco S.A. from nationalized lender NCG Banco and FinanMadrid from Bankia group. With the purchase of these small banks, Apollo will diversify its investments as well as expand its footprint in Europe.
Apollo currently carries a Zacks Rank #3 (Hold). Some better-placed investment managers include Janus Capital Group, Inc. (JNS) and Lazard Ltd. (LAZ). All these stocks carry a Zacks Rank #2 (Buy).
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