Prelios and Luzzatti launch ‘UTP’ fund for smaller banks

Italian alternatives asset manager Prelios Group is setting up a €250 million closed-end alternative investment fund with partner Luigi Luzzatti company, invested in distressed debt classed “unlikely to pay” – UTP.

Luigi Luzzatti is a consortium of small and medium sized cooperative banks and the fund’s main contributors will be Luzzatti’s shareholder banks. The fund will comprise UTP debt due from companies largely in the SME and corporate segment. The fund will implement debt recovery strategies “designed to put the debtor companies back on a performing basis, through proactive management of their positions focused on corporate restructuring”.

Partnering Prelios broadens the tools available to the Luzzatti shareholder banks “so that they can move ahead with their de-risking processes,” Luzzatti said in a statement.

“The new UTP AIF is one of the most significant initiatives of the new integrated NPL transaction platform set up for the consortium by Luzzatti,” said Luzzatti chief operating officer Luigi Avogadro. “It will enable our shareholder banks to take more effective restructuring action on positions classified as unlikely to pay in the next complex phase of re-emergence from the pandemic, including positions covered by moratoria, and at the same avoid wasting resources on non-captive operations.”

Prelios Group CEO Riccardo Serrini commented said that the new AIF is the only product created for small- and medium-ticket corporate UTPs. He added that because the fund is focused on the debts of small and medium-sized companies the new initiative, “will be of great importance not only for the Luzzatti shareholder banks, but for the heart of the Italian economy.”

The AIF is expected to be operational by the end of this year.