What really matters in international debt purchasing.

Monday morning, Hamburg airport. Security check, boarding, fasten seat belt, ready for departure: for Karel Smerak, this is the beginning of a typical working week. 

Smerak is one of three directors of the Transaction Center NPL Secured for Eastern Europe. “NPL” stands for “non-performing loans,” or bad loans. In Eastern Europe, EOS buys several hundred NPL portfolios every year. Smerak describes what he and his team do: “Out of Hamburg, we support the local teams, especially in large and complicated cases.”

However, Smerak can rarely be found at his desk in Hamburg. He is on the go for up to ten days a month. Today he is flying to the Slovenian capital of Ljubljana. There, with team lead Janez Klancar, he will discuss the purchase of a portfolio that also includes “secured NPLs,” i.e., debts that are secured, for example, by real estate.

The trade with non-performing loans is complex. In Excel tables, hundreds of fields – estimated market value, estimated proceeds from a foreclosure auction, estimated time needed to reach an agreement with a delinquent payer – must be completed. For this reason, in the afternoon Smerak meets experienced lawyers and corporate finance advisors, who will assist the team in the assessments. 

A meeting with potential co-investors follows on Tuesday morning. Good personal contact is indispensable, says Smerak: “If the deal goes through, we are bound to each other for a long time. Seven years can go by before the last property in a portfolio has been sold at a foreclosure auction.” In the evening Smerak flies to his primary place of residence, Vienna. For his job, the perfect location. “This is an economic hub for all neighboring countries: Austrian banks are involved in many of our transactions.”

Wednesday morning Smerak is on the way to one of these neighbors – Warsaw. He goes through the transactions with Dariusz Petynka, CEO of EOS in Poland. Where is the “onboarding,” the transfer of the customer’s right to collect a debt, completed? For which cases are court proceedings underway? “As a rule, we only take inventory once every quarter,” says Smerak. But in Poland, the business is booming, which is why he is now here for the second time in two weeks. There used to be five employees working in the area of secured debt; now there are 30. “There’s a lot to organize. You can’t clarify everything over the phone.”

In the afternoon Smerak meets lawyers again. Among other things, to talk about legal assessments of planned portfolio sales. Or progress on a law designed to set a fixed exchange rate for certain mortgages that have experienced significant value changes due to exchange rate fluctuations. Not light fare.

Smerak flies back to Hamburg on Wednesday evening. As always, just with carry-on baggage. “That’s rule number one when you’re flying,” he says. Rule number two is to always reserve a seat in one of the frontmost rows. “Altogether, that amounts to 15 to 20 minutes for each flight. Over the week, it really adds up.”

The last two days of the week are relaxed. This means above all follow-up and preparation. Smerak checks the details of a joint venture agreement in Slovenia. He plans NPL conferences, for example, in Athens, London, and Stockholm. And, of course, how and when he will get there. Fast lane, carry-on, seat in the first row – ready for departure.