EAA privatises its portfolio management subsidiary
- EAA Portfolio Advisers GmbH (EPA) gets new perspective as part of Mount Street Group
- EAA secures the required flexible servicing for the portfolio wind-down
Düsseldorf, 23 January 2017. Erste Abwicklungsanstalt (EAA) has sold its portfolio management subsidiary to Mount Street Group. The financial service provider headquartered in London will take over EAA Portfolio Advisers GmbH (EPA) including its approximately 90 employees at offices in London, Düsseldorf, New York and Madrid. Post-acquisition, EPA will remain a separate company providing tailored services for the EAA portfolio until at least 2020. The transaction is yet to be approved by the relevant regulatory authorities and a Closing is expected in the first half of 2017.
“The privatisation of EPA secures the capacities and expertise we will need in the coming years to continue winding-down the EAA portfolio successfully,” says Managing Board spokesman Matthias Wargers. The purchaser Mount Street has many years of experience in servicing international portfolios with a focus on real estate and structured credit. The acquisition of EPA is in line with the Group's aim to further expand its existing product spectrum and network of locations with EPA playing an integral role in achieving this.
“The sale to an internationally experienced financial service provider will give EPA’s employees a new perspective and thus help maintain the expertise on all aspects of the EAA portfolio. Additionally, EAA can benefit from the know-how of Mount Street Group for its own work,” Wargers says. Furthermore, the move enables EAA to benefit from increased flexibility for the remaining wind-down by turning fixed costs into variable costs that can be adapted to EAA’s actual needs and progress made with regard to the portfolio wind-down.
EAA founded EPA in 2014, taking on workforces of its former service providers Portigon AG and Portigon Financial Services GmbH, respectively. Thereafter, EPA’s services have consistently been tailored to EAA’s needs, whilst exploiting a significant amount of synergistic potential. “Now, however, EPA needs a perspective for the future to be able to continue guaranteeing the necessary quality in managing, evaluating and analysing the EAA portfolio. EAA’s tasks as a winding-up agency require a permanent optimisation of organisational and cost structures,” Wargers explains.
Since EAA has already reduced its portfolio by about 80% and undertaking new business under the EAA umbrella is prohibited, EPA would have been forced to continually cut back its workforce in the coming years were it not for its privatisation. Such a process could have threatened the stability of its services provided.