CAERUS secures new mandates for €350m debt finance
CAERUS Debt Investments AG, the Düsseldorf-based consultancy specialising in real estate debt, gained two major new mandates at the end of the last quarter from German institutional investors. CAERUS will advise both clients on the investment of a total of €350m in senior collateralised mortgage loans with high loan-to-value ratios, so-called whole loans.
The Düsseldorf-based CAERUS, headed up by Michael Morgenroth, a former chairman of INREV and a director of SIGNA Holding in Vienna, has now gained mandates of €420m since CAERUS’s founding two years ago. It has already placed €188m in three investments, securing the loans on both individual properties and portfolios.
CAERUS’s CIP Dr. Patrick Züchner commented, “For some time we have been noting considerably increasing demand for senior secured real estate loans, from a single source, for locations away from the top cities and use types outside the mainstream. This demand is not being adequately satisfied by the traditional market players. Individual clients advised by CAERUS have access to financing solutions for complex financing situations, for example in the area of larger portfolios.”
At €200m, one of the two new mandates won by CAERUS is from the Dortmund-headquartered Volkswohl Bund, a traditional mutually-held German insurer that’s been in business for nearly 100 years. Volkswohl Bund’s policy holders are private households and commercial ‘Mittelstand’ companies, and the relatively low-key insurer offers its policies via an extensive network of insurance brokers and independent financial salesmen.
Volkswohl Bund board director Axel-Rainer Hoffmann told REFIRE that the attractions of debt investment for his company were the low risk involved, the more attractive yield available, and that it is senior secured debt.
Although Volkswohl Bund has about 7% of its assets invested in real estate, and it offers mortgages to its policyholders, investing in debt is a new investment category for the group. With debt investments, he is not looking for either adventure or indeed, capital appreciation, he said, and certainly not at this point in the real estate cycle. As a fixed income investment, debt finance is an attractive option, he said.
Michael Morgenroth of CAERUS added, “Widening our investment solutions to include whole loans can provide investors with access to attractive yields. As part of our investors’ portfolios, these make a noticeable contribution to achieving their internal target returns.”