Expertise / Monitoring
Portfolio Monitoring & Recovery Strategy
After acquisition, we compare actual recoveries with the assumptions used to price the portfolio, and coordinate the workstreams that determine whether the two converge.
When this service is relevant
- A portfolio has closed and the investor has no local team tracking it.
- Collections run through one or more servicers and the investor needs an independent read on their performance.
- Cash is arriving but it is not clear whether the shortfall is amount or timing.
- A settlement proposal is on the table and the enforcement alternative has not been quantified.
- The recovery forecast has not been updated since acquisition.
- An asset has been repossessed and now has to be held, managed and sold.
Questions we help answer
- 01Are recoveries ahead of or behind underwriting?
- 02Why?
- 03Which exposures require intervention?
- 04Should a settlement offer be accepted?
- 05Should enforcement continue?
- 06Has the expected return changed?
- 07Which servicers or legal workstreams are underperforming?
Underwriting does not end at closing.
Portfolio performance should be continuously compared with the assumptions used to price the acquisition.
This allows the investor to identify underperformance early, update the recovery strategy and improve future underwriting.
At acquisition
After acquisition
- Expected recoveryActual cash collected
- Expected timingActual timing
- Expected legal costActual costs
- Expected servicing costActual servicing cost
- Expected collateral proceedsActual collateral proceeds
- Underwriting recovery forecastUpdated recovery forecast
- Expected returnUpdated expected return
Scope of work
Reporting and variance
- Restatement of the acquisition model as a live monitoring baseline
- Monthly or quarterly expected-versus-actual comparison at segment and exposure level
- Variance attribution: amount, timing, cost, or an assumption that did not hold
- Rolling recovery forecast and updated return calculation
Exposure management
- Recovery strategy for each material exposure: consensual payment, settlement, restructuring, enforcement or sale
- Settlement offers evaluated against the modelled enforcement outcome, net of cost and time
- Restructuring analysis where the borrower is still operating
- An escalation list of exposures requiring an investor decision
Third-party coordination
- Servicer performance monitoring against agreed targets and reporting standards
- Coordination of external counsel across enforcement files, with procedural milestones tracked
- Instruction and review of valuers, brokers and property managers
- Cash reconciliation between servicer reporting, bank records and the model
Collateral and repossessed assets
- Collateral condition, occupancy and title monitoring
- Holding cost, marketing and disposal tracking for repossessed assets
- Disposal timing assessed against the carrying assumption in the model
How a monitoring engagement runs
01
Baseline
Rebuild or take over the acquisition model and fix the assumptions the portfolio will be measured against.
02
Data flow
Agree the reporting fields, frequency and format required from servicers, counsel and the paying bank.
03
Variance
Compare collections with the baseline and attribute each difference to a cause.
04
Decisions
Bring settlement, enforcement and disposal questions to the investor with the alternatives quantified.
05
Forecast
Update the recovery profile and the expected return, and record what changed and why.
Typical deliverables
- Monitoring baseline derived from the acquisition model
- Periodic portfolio report: collections, variance, forecast, return
- Exposure files for material positions
- Settlement and enforcement decision notes
- Servicer performance review
- Updated recovery forecast and return calculation
- Investor and lender reporting pack
Scope
We are not positioned as a mass-market collection call centre.
Our role is to help the investor monitor the portfolio, assess available recovery options and coordinate the relevant financial, legal and operational specialists.
Reviewing a distressed-credit opportunity in Morocco?
If you are evaluating a portfolio, preparing a transaction or monitoring acquired exposures, we would be pleased to discuss the situation.