SitusAMC executive md and head of Europe Lisa Williams and director Alfonso Pagano discuss opportunities in the European direct lending market

Q: Alfonso, tell us a bit about your new role at SitusAMC?
AP: I joined SitusAMC this past July to lead the expansion of the firm’s servicing business beyond commercial real estate to include corporate direct debt, infrastructure and social housing loans (SCI 13 August). I’ve spent the last 15 years of my career servicing debt at some of the top global financial institutions in Europe and look forward to bringing that experience along with SitusAMC’s strong brand reputation in Europe, where we are known for our deep product knowledge and experience in the lending space, to help our clients elevate their loan servicing.

Q: Why did the company decide to expand its servicing business?
LW: Loans are in SitusAMC’s DNA. We already perform the role of facility/security agent and servicer for various lenders and arrangers in the commercial real estate space, so an expansion into a broader range of loan products was a natural evolution for us.

Q: What changes are you hoping to implement in this space?
AP: We’re building upon our wealth of knowledge in commercial real estate loan servicing to help our clients improve their broader lending practice. By bringing together our resources and enterprise-grade technology, we can streamline our payment processes and deliver more efficient, agile and reliable procedures than most providers.

LW: Lenders are looking for certainty in the servicing of their portfolios. We went through a long due diligence process to identify and implement technology that we felt would make a meaningful difference in the servicing of loans. The implementation of our automated payment system – SWIFT – will deliver this assurance when processing large number of payments, without the cost or procedural risk that other providers face who are not as tech-enabled as we are. 

Q: What are your views on the market and are there new trends emerging?
AP: Like in the US, European corporates rely on direct lenders more and more. We’re seeing an oversaturation of the US direct lending arket, while direct lenders only meet financing needs of 35% of European mid-market corporates. Many banks are busy with Covid-19 relief loans and are struggling to allocate the resources to originate new business. Also, with rising M&A activity and the stable and attractive returns offered by direct lending investments, there is a lot of optimism in Europe for this asset class.

LW: On the commercial real estate side, lending has bounced back and is very active across Europe compared to early-Covid timeframes. This surge is being led by increased transactional volume in warehouse, industrial, office and hotel sectors. Retail is still struggling, but the sector was already facing numerous challenges that were exacerbated by the pandemic.

Angela Sharda