A group of investors led by Sixth Street Partners has agreed to buy Credit Suisse's U.S. mortgage servicing business from UBS Group, according to people familiar with the matter.
Sixth Street is working with co-investor Davidson Kempner Capital Management on the deal to acquire UBS' Select Portfolio Servicing, they said, asking not to be identified because the details aren't public. The sale is expected to close in the first quarter of 2025.
UBS said in its second-quarter report this week that it had reached an agreement to sell the business without identifying the buyer. The deal would reduce the company's risk-weighted assets by about $1.3 billion, UBS said, representing a step forward in winding down or disposing of unwanted businesses inherited from its former rival.
On Thursday, UBS said it was liquidating another Credit Suisse legacy asset, a $2.2 billion real estate fund amid pressure from redemption requests. Progress in working down Credit Suisse assets helped the Zurich-based bank in reporting better-than-expected profit for the second quarter.
UBS said Wednesday that it doesn't expect to recognize a material profit or loss from the transaction.
Sixth Street, Davidson Kempner and UBS declined to comment.
UBS, which acquired Credit Suisse in an emergency rescue last year, has been managing Select Portfolio in its noncore and legacy business division. Select Portfolio has been a major servicer of home loans to people with poor credit for decades. Credit Suisse bought the business, which used to be known as Fairbanks Capital, in 2005. In the U.S., mortgage servicing is dominated by specialized companies whereas in Europe it's often done by banks.
Sixth Street, a $75 billion alternative asset manager, has grown rapidly amid the private credit boom. It recently bought property & casualty insurer Enstar Group for $5.1 billion, which was the second-largest private equity insurance deal of the year.
Sixth Street is also a player in asset-based finance and focuses on deploying anywhere between $100 million to more than $2.5 billion across areas including commercial and residential mortgages. Those efforts are led by Michael Dryden, who joined as a partner in 2022 from Credit Suisse.
