We’re pleased to share a non-performing loan (NPL) update to provide insight into the progress of both the current state of the NPL market and our expectations moving forward. For nearly two decades, NPLs have formed the foundation of our investment philosophy, offering an asset class with the potential for attractive risk-adjusted returns and meaningful social impact.
As stewards of your capital, we believe proactive, transparent communication is essential, especially in a dynamic economic environment where uncertainty can create both risks and opportunities. In this update, we break down an overview of PPR’s NPL acquisitions and portfolio activity, a view of the broader NPL market, as well as our future goals and strategies related to NPLs.
NPL Acquisitions
The first half of 2025 has been one of the most active acquisition periods in PPR’s history. In Q2 alone, we acquired more than 350 assets across 44 states, totaling over $61MM in unpaid principal balance and bringing our year-to-date acquisition amount to approximately $290MM. In addition to this strong acquisition activity, we completed over $114MM in loan dispositions, including a $55MM re-performing loan sale and more than 160 natural resolutions through borrower payoffs and foreclosures. These outcomes align with our historical resolution patterns and help sustain fund liquidity and performance.
Alongside this activity, we took steps to strengthen the financial structure behind the portfolio. We collapsed a prior securitization and repackaged those assets with newer purchases, reducing our financing costs by nearly a full percentage point. This adjustment enhances overall fund efficiency and positions us for continued scalability.
Under the leadership of Taylor Nelson, Director of NPLs, our team focused on sourcing loans directly from national and regional banks. This channel gave us access to less competitive, and thus better-priced deals, many with average loan-to-value (LTV) ratios below 50%. These low LTVs provide a meaningful equity cushion, offering additional downside protection even in a housing correction.
As always, our focus remains on capital preservation through conservative underwriting and disciplined asset selection while maintaining upside potential essential for our ability to provide preferred returns for our investors. The liquidity we secured through previous securitizations allowed us to move quickly on these high-quality opportunities and set the stage for navigating broader market dynamics in the second half of the year.
NPL Market
The economic environment in 2025 has been defined by shifting interest rates, inflation pressures, and uncertainty. While these factors have increased volatility in many markets, they’ve also created opportunities in the NPL space. Banks looking to offload distressed loans often offer discounts during uncertain times, allowing experienced buyers like PPR to acquire assets below their intrinsic value.
Importantly, homeowners today have higher equity in their properties than ever before, thanks to years of rising home values. This high equity means that even in default scenarios, the likelihood of recovering full principal is significantly increased, preserving investor capital. What’s more, this higher equity among homeowners creates multiple pathways to success: borrowers who want to stay in their homes are often motivated to work with us on loan modifications, while in cases where modification isn’t possible, the underlying property value helps protect the investment.
For high-net-worth investors looking for returns that don’t move in lockstep with public equities or bonds, NPLs offer a rare combination of downside protection, potential income, and strong returns—even during market turbulence. Given these current market dynamics, we’d also like to share how we’re positioning our strategy moving forward.
Outlook
Looking ahead to the second half of 2025, we’ll continue following our disciplined approach: acquiring loans at meaningful discounts, resolving them through borrower engagement, and selling re-performing loans to realize value. This model, refined over 17 years, has consistently supported stable, risk-adjusted returns for our investors. Non-performing loans are long-term, cash-flowing assets by design, and that structure allows us to capture deeply discounted opportunities while continuing to deliver consistent preferred payments.
Our current pipeline reflects strong momentum. A $150MM acquisition is expected to close soon, positioning the fund to benefit from ongoing market dislocation. In addition, we’re entering a heavy bidding period with over $1.1B in NPLs under review. We also expect additional government-sponsored enterprise (GSE) auctions in Q3. The timing of our next securitization will depend on how quickly these opportunities move forward.
By continuing to build a diversified portfolio backed by strong collateral, we aim to deliver consistent returns through a portfolio built on strong collateral and active oversight. Our experienced team, rigorous underwriting, and trusted servicing partners allow us to act decisively when high-quality deals surface.
Opportunity
With this clear plan ahead, it’s important to reflect on why our NPL approach continues to stand out. NPLs remain at the heart of PPR’s investment strategy, despite our strategy diversifying in recent years. Unlike speculative or highly leveraged funds, our conservative approach to buying discounted loans aims to protect principal and generate income uncorrelated with traditional markets.
Additionally, we invest in NPLs not only for their attractive financial characteristics, but also for their inherent social impact. Whenever possible, our goal is to work with homeowners to keep them in their homes, avoiding foreclosure and fostering positive outcomes for families. This approach allows us to protect your investment while making a meaningful difference in the communities we serve.
For investors seeking a combination of capital preservation, income, and social impact, NPLs provide an asset class that has historically performed well across market cycles. Our proven approach, leveraging our deep expertise, buying at a discount, and resolving loans efficiently, continues to set PPR apart.
Thank you for your continued trust as we navigate this dynamic market together.
If you’d like a closer look at our current acquisitions, pipeline, or upcoming securitization strategy, our investor relations team would be happy to walk you through the opportunities ahead.
