Cerberus Capital Management’s recent acquisition of Brocc Finance has transformed the Swedish fintech into a major player in Europe’s non-performing loan market.

Brocc is now the means for the USD 68bn investment manager to buy unsecured NPL portfolios across Europe. Brocc Chief Executive Officer Jonathan Klein-Strandberg is confident the firm is in pole position to be a competitive bidder for what he views as underpriced assets.

“We think the total addressable market in Europe is much bigger than what the ‘active’ part of the market currently is,” Klein-Strandberg told Debtwire in an interview.

It’s a view based on Klein-Strandberg’s experience on the other side of the trade.

After the company attempted to sell non-performing assets out of its consumer lending business in 2024, Klein-Strandberg saw offers significantly below the 50-plus cents on the dollar that sellers had gotten used to – well below what he thought was the assets’ true economic value. Partnering with Cerberus gave the firm the financial firepower to become an active buyer of NPLs.

For Cerberus, the acquisition deepened its analytical toolkit when assessing highly granular transactions. Buying unsecured NPL portfolios is a “very data-driven, data hungry strategy,” said Chief Investment Officer Jason Davis, who joined the company from Cerberus last year.

Cerberus was already the biggest buyer of non-performing assets across Europe, according to Banca Ifis research.

In order to operate a more scalable strategy, it needed the right infrastructure, Davis said. “Brocc was attractive because it was a fintech platform with a data and technology-based culture.”

Following the transfer of Cerberus’s NPL portfolio last year, Brocc now operates across 15 markets, including the Nordics, and central and southern Europe.

Unsecured consumer and SME NPL portfolios remain the bread and butter of Brocc’s NPL strategy, but the firm also looks at adjacent asset classes, including utilities and telcos.

“We’re well-funded, well-capitalised, and we have strong liquidity-raising capacity,” said Klein-Strandberg. “We’re looking for opportunities all over Europe.”

The gross stock of non-performing exposures of significant EU banks totalled EUR 373bn in 2Q 2025, equating to an average NPE ratio of 1.84%, according to Banca Ifis. Once plagued with eyewatering NPL ratios, banks in Italy and Greece have seen those ratios decline in recent years, in part due to active NPL markets. At the same time, banks in Germany and France saw rising ratios and a dearth of NPL transactions to offload the assets. NPL ratios rose by 89% and 63% respectively for Germany and France between Q1 2023 and Q2 2025, according to Banca Ifis.

Evolution

Brocc started life in 2016 as a peer-to-peer lender, aiming to connect individuals looking to lend with those seeking to borrow.

Three years later, the company began lending directly to consumers, largely offering loan-consolidation products with the help of an asset-backed facility from Goldman Sachs.

Klein-Strandberg soon realised that to grow faster, the company needed cheaper and more flexible funding.  In 2021 it acquired the specialist GCC Capital to gain a banking licence and, crucially, deposit funding.

Being a company with a single focus, operating at a small scale in a highly cyclical business throughout the economic cycle was tricky.

Attempting to sell Scandinavian NPLs exposed what Klein-Strandberg saw as a market with a dearth of buyers. While the Scandinavian market used to have around 10-15 active players, this number has now shrunk to just a handful.

“Many banks have not been selling over the past couple of years because they’ve come to the same conclusion we did – that the true economic value of these is better than what they’re being offered,” he said.

Buying NPLs also tied into Brocc’s track record originating loans for consumer debt consolidation. Around 85% of the loans the fintech originates are used by consumers to consolidate other debts.

Brocc is not a servicer, and Klein-Strandberg is clear that the firm is not interested in becoming one. Instead, it uses partnerships with local servicers to manage loans across Europe.

Last year, Intrum agreed to sell its remaining 35% holdings of a joint venture with Brocc for around EUR 215m, for a realised gain of EUR 45m. Intrum will remain the servicer of the portfolios under the agreement.