Strategic review to evaluate and benchmark performance

Utilising expertise to evaluate non-standard debt portfolio

Debt advisory and consultancy case study

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The client

Lowell Group

Situation

Lowell wanted an independent valuation of a non-standard complex portfolio

The project

Debt purchaser, Lowell Group, required a full valuation of a complex portfolio of debt that contained performing and non-performing loans. Because the portfolio was non-standard it required bespoke modelling to assess its value, within a very short sale timeline.

TDX Group undertook a full valuation and scenario analysis on this complex portfolio. This included:

  • Validation of the valuation file, including original loan amount, balance, payment history and loan status history.
  • Data file fixes and enhancements to enable an accurate payment model to be built
  • A deep-dive analysis to review payment trends in order to assess the key drivers of the portfolio’s performance in the short and long-term.
  • Account level simulation modelling to capture the movement of loans between each status,and their resultant payment behaviour.
  • An assessment of the servicing costs associated with the on-going management of the portfolio

TDX Group solution

A bespoke Advisory Services engagement which included the development of an innovative account level simulation model to capture the movement of loans between the different paying statuses to ensure the collections forecast was accurate.

Results

TDX Group presented the findings and valuation through interactive sessions with the Investment Committee. By doing this, TDX Group provided Lowell with an in-depth and trusted view of the portfolio and the key areas of risk. This enabled Lowell to make a well-informed investment decision.

Client feedback

We appointed TDX Group to support us on this project to gain an independent view of asset valuation and the requirement for a bottom-up model to be built. We were impressed with their expertise and pragmatism which showed deep experience and understand of debt collection and customer treatment. The speed and quality of their work was exceptional. - Colin Storrar, CFO Lowell Group

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