Foreign investors have acquired a taste for collecting non-performing loans (NPLs) in Russia. Goldman Sachs started the trend with an investment in Sequoia Credit Consolidation, the country's largest collections agency, in September 2006. A year later, German asset manager Wermuth bought a stake in Pristav, the number two agency. Another of the leading agencies, FASP, is itself investing to expand its operations into neighbouring markets, namely Kazakhstan and Ukraine. And one of the largest eastern Europe-focused funds, East Capital, made its second investment in the industry in early 2010 - a Russian joint venture with western Europe's leading collections agency, Intrum Justitia. East Capital has owned a 33% stake in Morgan & Stout collection agency since 2008.
Andreas Boesenberg, the deputy chief investment officer for unlisted investments at Wermuth Asset Management, says finding a company that can deliver efficiency improvements is of the utmost importance for a private equity investor.
