U.S Consumer Recovery Fund
CONTACT USU.S CONSUMER RECOVERy fund
10%
Target return per annum.
Open ended.
300+
Investor success stories
$5.5bn
Our partners have originated and purchased over $5.5bn worth of face value consumer debt.
Q&A with Peter Bennett
Head of Loan Purchasing and Origination
What types of loans do you like to buy?
What is your process for selecting what debts to purchase?
A typical discounted debt portfolio is made up thousands of loans from consumers who stopped paying, to the extent that the account was written off by the issuer (e.g. Citibank, Wells, HSBC etc.). Usually these loans are less than $1000 owing per individual debtor. We value each segment separately based on our historical experience with comparable portfolios.
There is a great deal of analysis that goes into choosing which debt to bid on. We also receive a “Seller Survey” from whoever is selling the debt.
The seller survey will contain a large amount of information on the debt portfolio, such as the types of debts, issuers, geographic location of the consumers, their contact information, age of each loan, charge-off date and the last payment date. At the end of the day, every portfolio has a “right” price. The lower the better. We typically lose three bids to each one that we win.
What is a forward flow agreement?
The most optimal position to be in as a debt buyer is to secure a “Forward Flow”. A forward flow is where an issuer sells accounts on a monthly or quarterly basis that have certain characteristics in terms of age, debt type and amount of debt. This allows the debt buyer to optimise the work effort on the portfolios. Thus with monies flowing from investors, we are in the privileged position of being able to arrange forward flow agreements, which is very advantageous.
How many people are involved behind the scenes buying and recovering the debt?
Quite a few. We want collection agents that will go the extra mile and find the hard-to-find debtor, because it is those consumers who are unlikely to have been contacted by other creditors and are more willing to settle their debt. At the moment, we probably have 100 collectors working all the files that we manage.
Are relationships with the banks important and beneficial when it comes to purchasing?
Relationships with banks and other creditors are important. But it is also important to have good relationships with other debt buyers.