UTP Italia is an innovative fund that combines the instrument of securitization with a multi-sector Alternative Investment Fund reserved to professional investors, specialized in “granular” Unlikely to Pay (“UTP”) credits (deriving mainly from mortgages and loans disbursed to SMEs and households).
The framework agreement, which it will see four of the main Italian banks act as investors in the fund, defines the start of the operation for a nominal value of approximately 160 million euros. The goal for 2022 is to reach 600 million euros of additional contributions, with a “”cap”” target of 1.5 billion euros in 2023.
The product has innovative features for the Italian market, with an investment focus on portfolios of granular UTP loans, both guaranteed and unsecured. The investment structure can count on Intrum’s specific skills as a credit servicer through the synergistic use of the Fund (Sagitta) and the credit securitization tool (Zenith Service). The UTP Italia Fund has also a direct lending sector, the capital of which will always be raised from institutional investors, with the aim of disbursing loans in support of debtor companies.
The Fund started operations in March 2021 and rasied approx. 758 million Euro. Exclusive advisor of the Fund is Europa Investimenti, which has a consolidated know-how and track-record of investment in the distressed assets sector.
The Fund has a multi-fund and multi-asset structure therefore it has a wide flexibility of investment in credits (of any nature), real estate, financial instruments, securitisations, as well as the possibility of intervening in the area of debt restructuring operations, pre-bankruptcy composition agreements and bankruptcies and in the context of special situations.
The investment strategy is aimed at obtaining a net return for investors of 13% (IRR target) in a total period of 8 years, of which the first three dedicated to investments and the following ones (max 5) to the realization of assets.