The Italian market is been for years one of the biggest NPL international playgrounds leading, for this reason, many Italian and international investors to our distressed credit market opportunities.
Let’s try to better explain the current situation in Italy.
The growing demand for Italian NPLs by new investors could push the sale of non-performing loans backed by real estate (secured). This can also be seen from the report of CBRE regarding the NPL outlook.
According to this outlook, US funds and investors, in Italy since 2014-2015, sprout among the operators interested in the Italian loan market.
In the last 18 months, are coming some large industrial groups already operating in the international non-performing loan market. At this moment, it is possible to identify more than 50-60 institutional investors, coming from all over the world, concretely focused and interested in the Italian NPL and UTP market.
The non-performing loans (NPL) are situations already in actual delay on payments, while unlikely to pay (UTP) refers to potentially difficult situations, but which are still recoverable.
We offer our legal assistance for this kind of purchase, and we strongly recommend a minimum investment of at least € 500,000. Due to the limited inventory, the goal of the purchase is mainly an investment, a safe box, and asset diversification.
In 2018, transactions were recorded for a record amount of over € 100 billion, driven in particular by the GACS. The GACS is an unconditional, irrevocable and first demand public guarantee introduced by Italian Law Decree 18/2016.
The GACS, guaranteed from the Italian State, allows banks to transfer their non-performing loans to new subjects that can better manage them: a rule that it has been decisive in the NPL business boom in recent times.
A dynamic market that soon may require new sources of supply, including secured loans, which include a large portion of loans with properties as underlying assets. In this context, the possibility of creating further direct product to real estate investments will depend on the management activity and the strategies adopted on this market.
In 2019, according to latest data from a PwC survey: there are € 390 billion of NPL, where around € 188 billion are NPL within Italian banks (of which € 105 billion in NPL and € 83 billion in UTP), while € 202 billion are currently in investors’ portfolios.