Mount Street targets majority stake sale

Mount Street, one of the leading loan servicing firms in the European real estate debt market, is aiming to sell a majority stake in the company, affiliate title Real Estate Capital Europe has learned.

The London-based company is understood to have appointed UK and South Africa-headquartered bank Investec to advise on a majority sale of the group. It is thought Investec began marketing the business in February. Mount Street and Investec declined to comment.

Mount Street, which was founded in 2013, is an independently owned business. It is led by co-founder and chief executive Paul Lloyd. Co-founder Ravi Joseph serves as the company’s executive chairman, after stepping down as chief executive in February 2022. Aside from real estate, the credit management business provides outsourcing services to clients in asset-backed lending markets including shipping, as well as corporate debt, and structured finance.

The sale process follows a period of growth for the company. During 2022, it grew its assets under management by a record 72 percent, reaching €130 billion. Commercial real estate loans accounted for the largest portion of its managed assets, with a total of €86 billion.

Mount Street onboarded €24.4 billion of commercial real estate transactions in the European market during 2022 to December. The total included €9.9 billion of loans which it took responsibility for as part of its deal with Aviva Investors in July 2022 to outsource the management of the UK insurer’s assets alongside UK banking group HSBC. In total, the firm added 11 commercial real estate clients in 2022 and hired 40 people.

Mount Street has expanded its geographic reach in recent years too, including in the US. In March, it said its US business had grown to managing $25 billion of AUM across its two main business lines – primary servicing of balance sheet loans and special servicing on commercial mortgage-backed securities deals. Mount Street is also active as a servicer in the smaller European CMBS market.

In its accounts for the year ended 31 December 2021, published this month, the company suggested it expected to be more active in workout situations in current market conditions.

“It is expected that some of the current CRE servicing book will move into (higher margin) special servicing. Management also expects to win mandates for special servicing of loans that are currently now named with other servicers and that the business is well positioned to take advantage of developments in any market.”