Increase values – with foresight and experience
The EAA‘s portfolio is complex. Extensive product or sector know-how and many years of experience in the management of global portfolios are necessary for winding up the very different and frequently complex exposures. Using its expertise, the EAA has created the instruments it requires to complete its mission. A report of experience of the EAA experts.
Portfolio wind-up based on clear principles
The EAA‘s wind-up plan determines the focal points for the wind-up work of a given fiscal year. The assets are assigned to three basic strategies:
- The „Sell“ portfolio groups together all positions for which a price is likely to be achieved that equates to or exceeds the value in the wind-up plan.
- The „Restructuring“ portfolio comprises exposures whose results can be improved through targeted measures.
- The „Hold“ portfolio contains all positions that promise better results if they are held to maturity rather than being sold off quickly.
The wind-up plan forms the basis of all decisions. All values, indicators and measures are subject to continuous review. Current market parameters and risk assessments can change, and if they do, the EAA has to react and adjust the planning as necessary. If a loan from the „Sell“ portfolio fails to attract the anticipated offer in the bidding process on the secondary market, the EAA postpones the sale. If the repayment of a bond in the „Hold“ portfolio appears to be threatened by unexpected problems incurred by a borrower, the EAA must at least consider an early sale – despite potential negative effects on the wind-up plan.
The EAA revises the entire planning after one year at the latest. Risks and costs for the portfolio are reassessed, focal points are drawn up for a new fiscal year and strategies are updated for the different sub-portfolios for loans, securities, equity investments and derivatives.