East Capital Explorer, East Capital Financials Fund and Intrum Justitia Jointly Invest in Russian Non-Performing Consumer Loan Portfolios

East Capital Explorer, East Capital Financials Fund and Intrum Justitia jointly invest in Russian non-performing consumer loan portfolios

East Capital Explorer and Intrum Justitia, together with the East Capital Financials Fund, intend to invest in a joint venture which will seek to purchase portfolios of non-performing consumer loans that are non-secured with focus on the Russian market. The total investment will amount to EUR 20m, of which Intrum Justitia intends to invest EUR 10m.

The Russian non-secured debt industry comprising non-performing retail loans such as consumer loans, vendor loans, credit card debts and car loans have increased significantly following the recent financial crisis. Banks are increasingly outsourcing collection to local collection agencies or selling their non-performing consumer loan portfolios on the market in order to improve cash flow.

The portfolios purchased by the joint venture will be serviced by selected local service providers. East Capital Financials Fund partially owns Morgan&Stout (M&S), a Russian collection agency, which will be included in the selection.

Gert Tiivas, CEO East Capital Explorer, says: “Together with the other investors and Morgan&Stout, we have a very strong execution capability to generate attractive returns on this investment.”

Lars Wollung, CEO and President of Intrum Justitia, says: “The joint venture is a first step in Intrum Justitia’s prospective future expansion into the Russian market. Together with our reputable partners we will explore the potential in this very interesting market.”