One of the key things which sets illimity apart as a different player in the financial services arena is our focus on corporate distressed credit. Specialising in attractive and growing areas of the market, and fully integrated in the industry value chain of investment, financing, servicing and remarketing of distressed assets, this focus forms a central pillar of our vision to create a new paradigm bank.
Over the past year - an extremely challenging one, due to the Coronavirus pandemic and its assorted economic problems - it has only grown stronger. Underpinned by robust business origination capabilities, our Distressed Credit Investment and Servicing (DCIS) division had a very positive Financial Year 2020, ending it on a high with particularly positive results in the last quarter.
What makes a successful 2020?
In Q4 alone, we generated business between distressed credit investments and senior financing for €284 million worth of distressed credits, out of a total €484 million realised in the whole of 2020. In such a difficult year for all sectors of the economy, a few elements of our DCIS division enabled us to have this success, and to turn it into a beneficial twelve months.
The positive trend of our cash flows was augmented by our dynamic approach to portfolio management that we experimented with. We also decided to take the plunge into new areas for illimity, such as the UTP (Unlikely to Pay) portfolio market, the distressed credit market for the rapidly expanding renewable energy sector and the Special Situations real estate sector. These niche markets represent, to us, an opportunity to combine large, expected returns with real social impact for the better. Our new servicing platform, Neprix, has also enjoyed outstanding growth, and gives us a unique strategic positioning.
As in all divisions of illimity, our selectiveness sets us apart – for example, only €8 billion worth of GBV (out of €56 billion worth of analysed opportunities) has been signed since illimity’s creation. Originated business in terms of net book value of investments and financings has reached almost €1.7 billion (of investment including the senior financing business), while servicing assets under management are over €9 million, having decisively exceeded our target for the year.
Despite the economic fallout from Coronavirus, we have also been able to exceed our cash flow plans. The booked portfolio has collected approximately €222 million since inception – almost €100 million more than anticipated, based on a mix of judicial and out-of-court recovery strategies.
Neprix
Neprix is Italy’s leading operator specialising in the management of corporate distressed credit, and the sale of the underlying assets. Last year, we launched Neprix Sales, with more than 120 people dedicated to the remarketing of distressed assets, which has seen phenomenal growth. This increased visibility and unique positioning in the real estate sector gives us a golden opportunity to create additional services for our clients.
With €6.5 million of credit GBV, and €2.6 million value of real estate holdings and other capital goods under management, Neprix has now become a point of reference in our industry. We are confident that it will continue to grow in 2021, with great profitability into the future.
