Valuation challenges
A European financial institution sold Aktiv Kapital a portfolio that performed far below expectations. This was primarily because the client had failed to disclose that the payment histories in the portfolio were driven by heavy discounting prior to the sale. This discovery forced us to price potential new purchases from the client with an additional risk premium, resulting in offering prices lower than their expectations of fair value.
Building on insight
We worked together with the client to define a mutually beneficial deal structure. The goal was to create more value from the assets. The client would provide Aktiv Kapital with better insight into the loan portfolios they were selling, which would allow us to collect on them more efficiently. We would then benefit mutually from the value we created as a result. The new deal structure gave the client an initial payment, plus a percentage of our collections on the portfolio for several years.
A deeper relationship
The portfolio has performed well, benefitting both Aktiv Kapital and the seller. We have re-established a stronger working relationship with the client that has solid potential for expansion.