10 Oct 2023Recognyte

Apollo accelerated NPL portfolio underwriting with Recognyte technologies

Apollo Global Management Inc. is a high-growth alternative asset manager seeking to provide clients with excess return at every point along the risk-reward spectrum.

Headquartered in New York City and with offices all over the world, it provides investment management and invests in credit, private equity, and real assets. As of December 2022, the company had $548 billion of assets under management. 

The challenge

After the peak of the Cyprus financial crisis, Apollo was keen to bid on the first large NPL portfolio sale made by the Bank of Cyprus in its deleveraging process, in a project codenamed Helix. The portfolio consisted of 14,000 large and mid-corporate loans secured by 9,000 real estate assets with a contractual value of €5.7bn.

The portfolio seller invited interested parties to bid for the portfolio. One of the potential bidders was Apollo. While Apollo was experienced in bidding on NPL portfolios, this was its first foray into the Cyprus market, and so its Portfolio Manager engaged a servicer familiar with the local market to support its analysis and portfolio review. As part of that process, Recognyte software was employed in supporting Apollo in its bid with its portfolio underwriting analysis.

The solution

Apollo received the data tape from the bank and Recognyte was given the task of enriching the existing data set. Using its DataScout remediation and enrichment solution, it ensured that the minimum property identifiers were available as these were critical in matching each property with the land registry database.

With all data assembled, DataScout was able to enrich the dataset by fetching another additional 80 pieces of information that the land registry stored against each property registration number. From this data, GPS coordinates were discovered for each property and their locations plotted on a map. With known property locations, DataScout could include comparable property information and supply liquidity scoring from its wealth of information stored about property sales transactions and local demand and supply. Armed with this information, the underwriting process could begin.

The enriched data set was moved into ActiveEstate, Recognyte’s powerful portfolio management tool where it acted as a Virtual Data Room (VDR) for the bidder to access and evaluate the data. Apollo segmented and stratified the properties by geography, by property type and by value. It offered the servicer a sample of 450+ collateral, comprising high and low value properties, to underwrite and assess which it did through standard drive-by and desktop valuations.

The outcome

Apollo’s portfolio evaluation took less than 90 days, during which time it was able to estimate the value of the entire portfolio and the work needed to recover asset value from the portfolio sample to arrive at a bid price. Apollo was subsequently selected as the preferred bidder and went onto successfully win the portfolio, forming Gordian Holdings as its acquisition company and servicer to manage the loan workouts.