Pepper Advantage Ireland, the loan services provider used by investment firms and banks, is looking to develop new lines of business to diversify as the post-crisis era of large non-performing portfolio sales fades.
The firm, which entered the Irish market in 2012 and is best known for servicing mortgages secured by collateral, plans to launch a new business – called Harbour Credit – aimed at managing unsecured consumer credit for banks, utility firms and semistate agencies, according to chief executive Niall Sorohan.
Pepper also plans to work closely with its sister company in the United Kingdom on offering institutional investors in non-banks and credit funds a service to provide independent oversight of their investments, he said.
This so-called strategic servicing initiative comes amid rising scrutiny of the sector, following the collapse this year of London-based specialist property lender Market Financial Solutions, and wider turbulence in the US private credit market, where nonbank funds play an increasingly central lending role.
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“Our Strategic Servicing solution and Harbour Credit address a real gap in the Irish market and reflect our confidence in the opportunity here,” said Sorohan. “We’re building a broader, more resilient business on the back of direct demand from clients.”
The most recent set of accounts for Pepper Advantage Ireland shows that its assets – mainly comprising mortgages – under management fell to €20.4 billion at the end of 2024 from €22.8 billion a year earlier, driven mainly by borrowers paying down debt and some portfolio disposals by clients. The Irish company has 460 employees.
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“The days of major loan sales coming out of banks is definitely ebbing,” said Sorohon.
The company’s UK-based parent, Pepper Advantage, was acquired by US private equity firm JC Flowers early last year for an undisclosed amount.
Sorohan said that the Irish unit is also planning a significant technology upgrade this year to roll out a group proprietary credit management platform, called Prism, which gives servicers and their clients access to real-time data, automated workflows, and modern servicing tools.
Prism is already being used to manage more than €3.5 billion in assets across the UK and Spain. It is on track to service the full €75 billion of assets under Pepper Advantage management over the coming years, according to the company.
The Irish unit also plans to reintroduce field agents for in-person visits for mortgage customers who may benefit from additional support. Some 5 per cent of mortgages serviced by the group are in long-term arrears, according to Sorohan.
“Of that 5 per cent, I’d say 50 per cent don’t engage [with Pepper],” he said, adding that the company was last year able to provide solutions for about 30 per cent of long-term arrears customers that opted to engage with it. He said that proactive engagement by fund servicing firms and lenders is heavily regulated by the Central Bank [of Ireland].
Sorohan echoed comments from Bank of Ireland and AIB last week in saying that Pepper has not seen a fresh uptick in arrears cases as a result of the energy-costs crisis stemming from the Middle East conflict.
“Obviously, if this crisis continues or gets worse, it affects everybody,” he said. “But we’re fully attuned and ready, willing and able to help people if they do find themselves in difficulty.”
