Focus of the Receivables Fund
On behalf of third party investors we are regularly looking for investment opportunities in receivables. We strive for a high level of specialization and we focus purely at:
Our preferred receivables portfolios typically have a size of Eur 1 – 10 million.
They may be NPL’s (consumer loans, credit card debt) or non-financial in nature (energy, telecom, publishers).
The debtors should be based in The Netherlands, Belgium, Germany, Spain, Turkey, UK, Israel or the USA.
Receivables portfolios have to be transferred to a Special Purpose Vehicle which functions as a “bankruptcy remote” structure.In principle we require a Board seat to monitor performance on behalf of investors. In practice, we find that borrowers or sellers put a high value on our industry expertise and strategic advices, as well as our operational & risk management know how.
In continental Europe, we find that only a limited number of financiers are active in this market segment.
Investment criteria Receivables Purchases
Reliable historic actual performance date of portfolios are required and receivables should be sufficiently homogeneous.
Collection companies wanting to collect the portfolios have to accept full allignment with the investor, including: bonus/malus arrangement, payment waterfall, stop loss, benchmarking with a competitor collection company, right to give collection instructions, implement programme for continuous improvement of collection rates, reporting standards plus a participation in the equity of at least 10%.
Investment criteria Receivables Loans
Portfolios should be homogeneous and historic write-off should be low, or (for distressed debt portfolios) stable and predictable. Loans have a duration of maximum 3 years. No redemption scheme is applicable. Instead the actual drawing is linked to a borrowing base.
Senior loans are granted up to 50% borrowing base of underlying portfolios (factoring: 60%) and subordinated loans are granted up to 75% (factoring: 85%) borrowing base.
Factoring portfolios preferably are insured with a credit insurer and full recourse.
Luxembourg offers a favourable regeime for investors in receivables portfolios. Corporate income tax may be reduced to 0% (!). Instead a net asset value tax (0,5% of bookvalue) has to paid.
The securitizatio facility offers a possibility to also reduce the net asset value tax to 0% and, in addition, to reduce the VAT on collection service fees to 0%.
We assist investors in relocating portfolio investments to Luxembourg and we are prepared to serve on the Board of Luxembourgian SPV’s.