24 May 2018

Italian Banks Tap Private Equity for Help

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American investment firms have found numerous opportunities to capitalize on the turmoil in Europe’s banking sector by buying distressed assets. But one major private equity firm, Kohlberg Kravis Roberts, is taking a novel approach.

K.K.R., along with the restructuring firm Alvarez & Marsal, has signed a preliminary agreement to join forces with two of Italy’s largest banks to try to revitalize a pool of soured corporate loans, according to a statement on Tuesday from the banks, UniCredit and Intesa Sanpaolo, and the two firms. The arrangement, the details of which are subject to continuing discussions, may allow the banks to maintain a degree of control over the loans and share in any financial improvement.

By contributing restructuring expertise and additional capital, the firms may help increase the likelihood that the loans will be paid back. The companies did not say how large the potential loan pool would be or how much money would be committed to the project, though they said more details would be disclosed after further discussions.

Click here for the full article in the New York Times.

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