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It’s hardly a secret that a host of alternative financial investors ( private equity firms, hedge funds, etc. ) are active players in the European banking sector as shareholders in challenger banks and start-up digital neobanks across the region as well as in more established retail, commercial and specialized banks. As the bank consolidation cycle heats up, alternatives will play a role alongside bank-to-bank activity.
In recent days, Cerberus Capital Management announced its latest acquisition: Brocc Finance. Originally founded as a peer-to-peer lender in 2016, Brocc acquired a banking licence via a takeover of a licenced bank in 2021 and now self-describes as a technology-driven financial platform. It operates in specialized consumer finance in Sweden and Finland. Cerberus plans use its position to expand Brocc’s core lending and deposit franchise.
Accelerating business growth and tweaking business profiles to suit specific areas of interest while right-sizing the banks they buy into are key drivers of private equity interest in banks. Driving growth was behind, for example, Warburg Pincus’s acquisition of a minority stake earlier this year in UK specialist lender United Trust Bank.
Alternatives have also entered the banking industry by acquiring the ashes of burned-out banks with distressed assets in which they see value. Cerberus, alongside JC Flowers, GoldenTree and Centaurus, for example, acquired HSH Nordbank ( renamed Hamburg Commercial Bank, HCOB ) in Germany, which had been laid low by heavy exposure to bad shipping loans and structured credit.
Cerberus also acquired Austria’s disgraced bank Bawag in 2006, after it had been holed beneath the water by heavy exposure to and entanglement with disgraced futures and commodities broker Refco, which spectacularly collapsed in 2005. Cerberus partially exited via Bawag’s 2017 IPO and fully sold out in 2021.
Financial buyers also target banks that are active in profitable areas they know well, invariably involving credit management, debt recovery and non-performing load ( NPL ) servicing. To that point, Cerberus’s deal with Brocc also plays into its strategic expansion into the asset management of NPLs. Brocc plans to build a specialized debt restructuring capability ( as a specialized debt restructurer ) and acquire third-party NPL portfolios.
From specialized services to core banking
Interestingly, Cerberus appears to be pivoting away from Germany, leaving a lot of speculation about what it does with its HCOB stake, which it has held since 2018. The firm had already sold down its equity stakes, 3% and 5% respectively, in Deutsche Bank and Commerzbank by 2024, which it had bought in the wake of rampant speculation about a merger of the two.
Its major European banking play now is in France, where in 2024 it recreated Credit Commercial de France ( CCF ), the full-service bank that operated between 1917 and 2020, at which time it was acquired by HSBC. It’s a bold play to build a banking force in a country that is dominated by five mega-banking groups ( BNP Paribas, Crédit Agricole, BPCE, Société Générale and Crédit Mutuel ).
But CCF is now a top 10 bank in France. The CCF brand was re-established after Cerberus acquired HSBC’s French retail operations in 2024. Prior to that, it operated as My Money Bank, a hangover name from Cerberus’s 2017 acquisition of the former GE Money Bank France, the consumer finance unit of GE Capital ( the behemoth former financing arm of General Electric ).
To lend some serious domain expertise to its French banking build-out, Cerberus has a couple of banking heavyweights on its board. Chat Leat, a 40-year veteran of Chase, Salomon Brothers, Citigroup and now a serial entrepreneur, has been engaged with Cerberus for some years now. He’s chairman of CCF’s supervisory board, sits on HCOB’s supervisory board ( and was previously on Bawag’s board ).
In recent weeks, Antonio Horta-Osorio, a senior advisor to Cerberus since 2022, was appointed as deputy chairman of CCF, bringing the banking legend back into a public banking role following his resignation as chairman of Credit Suisse in 2022 for breaching Covid restrictions. Horta-Osorio previously spent 10 years as chief executive of Lloyds Banking Group, and he was responsible for turning the bank around following its bailout by the British government at the time of the global financial crisis, a task that took a serious toll on his health.
His time at Lloyds followed an extended period in super-senior global roles at Santander group after working at Citibank and Goldman Sachs. Horta-Osorio is reported to have been involved in Cerberus’s acquisition of HSBC France’s retail assets, the CCF rebranding and strategic and rebalancing plans. His appointment certainly gives the impression that Cerberus is serious about this and isn’t just eyeing the build-out of CCF as an opportunity to flip and move on ( although only time will tell ).
Perennial exit cycle
Of course, moving onto the next opportunity is a core tenet of financial investor engagement. The hold cycle means that financials are serial and focused sellers, assuming they are successful in creating the financial conditions that allow for a profitable exit.
Getting out at a profit has proved difficult in European banking in recent years; but, as the rising rate cycle transformed bank profitability and valuations, sellers have been able to realize reasonable exit prices, for example:
Elliott Management had reportedly been eyeing an IPO of Banca CF+, the Italian small and medium sized enterprise ( SME )-focused bank ( formerly known as Credito Fondiario ) it initially bought into in 2015 to expand its debt recovery business. The debt recovery unit, Gardant, was spun off from the banking business in 2022 and merged with doValue, itself owned by US hedge fund Fortress. In June, CF+ mounted a takeover bid for Banca Sistema, another specialist bank.
Proving that it doesn’t always go right, soon after Oaktree Capital Management sold Banca Progetto, an SME-focused digital lender in Italy, to Centerbridge in September 2024, the bank was put into special administration. In September 2025, the bank was rescued and recapitalized to the tune of €400 million by Italy’s deposit insurance fund and the country’s five largest banks.
I see that Centerbridge Partners is suing Oaktree Capital Management to void the acquisition of Progetto, which is embroiled in a legal case involving alleged loans to a mafia group ( you couldn’t make this stuff up ).
