Global Debt Sales survey 2012 - Vastgoedjournaal

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ReturnrequirementsReturn requirements on deals increased over the past year, with47 percent of buyer respondents saying they have increased theirtarget internal rates of return (IRRs) and 47 percent saying they hadnot changed. Investors interviewed said that increased turmoil in financialmarkets led to them seeing a higher return. One noted that developedmarkets were generating emerging-market-level returns, which meantthat they needed to add an even higher premium for investment, inemerging markets.“The funds we have were raised with a certain IRR hurdle and we arenot changing it. Our underwriting assumptions may get harder to reflectthe current turmoil,” said one buyer.IRRs vary across markets in line with risk. Germany is seen as alower risk market and best positioned to deal with any fallout from theEurozone, as opposed to Spain which is commanding a higher IRR fromdebt buyers in line with higher risk.We may be at an inflection point in terms of returns. The lack of supplyof assets in some markets is increasing competition for the transactionsthat are out there, so buyers will have to take a hit on the return if theyare to win the transaction. While in other markets such as Spain, Portugaland parts of Central and Eastern Europe, buyers are requiring higher andhigher returns to take on the uncertainty. This is best evidenced in theUK where the buyer market for residential NPLs is far greater than theavailable supply. The outcome has therefore been favorable for vendors,as buyer competition and low teen IRRs have driven pricing far higher.“Maturity defaults and foreign banksretrenching will create a German NPLopportunity larger than in the last cycle.Dr. Ruprecht Hellauer, Founder of Albulus Advisors Germany GmbH”22 GLOBAL DEBT SALES SURVEY © 2012 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity.
RETURN REQUIREMENTSDid your IRR requirements a) increase b) decrease or c) remain thesame in 2011 as compared to 2010?Buyers’ IRR RequirementsIncreasing47%6%Decreasing47%Remained the sameSource: KPMG International, 2012Do you envisage your IRR requirements a) increasing b) decreasingc) remaining constant for 2012 as compared to 2011?Buyers’ IRR RequirementsIncreasing 19%Decreasing14%67%Remained the sameSource: KPMG International, 2012© 2012 KPMG International Cooperative (“KPMG International”), a Swiss GLOBAL entity. DEBT SALES SURVEY 2012 23
Page 1 and 2: Global DebtSales survey 2012Portfol
Page 7 and 8: MARKET OVERVIEWBasel IIIIncreasing
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Page 12 and 13: MARKET OVERVIEWIs leverage on the w
Page 14 and 15: Assets comingto marketSpain, the UK
Page 16 and 17: ASSETS COMING TO MARKETEmerging ass
Page 18 and 19: CompletingtransactionsOverwhelmingl
Page 20 and 21: COMPLETING TRANSACTIONSWhat types o
Page 24 and 25: RETURN REQUIREMENTS“We are seeing
Page 26 and 27: A GLOBAL PERSPECTIVEclosing experie
Page 28 and 29: A GLOBAL PERSPECTIVELATIN AMERICA N
Page 30 and 31: About theresearchKPMG conducted an
Page 32: ContactsPortfolio Solutions GroupGr

Global Debt Sales survey 2012 - Vastgoedjournaal

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