FAP launches €250m Germany-focused debt fund

Berlin-based independent investment manager FAP Invest last week formally launched its €250m mezzanine fund focused on real estate existing, refurbishment, and development projects in Germany, as well as selectively in the Netherlands and Austria.

The vehicle, FAP Balanced Real Estate Financing I is a master/feeder fund, based in Luxembourg with the legal form of a fully regulated S.C.Sp., SICAV-SIF. The Bank of Hauck & Aufhäuser Luxembourg is acting as fund manager (AIFM), while FAP Invest is taking over the role of investment consultant and advisor. Others invoved in the fund's construction were lawyers Greenberg Traurig, accountants PriceWaterhouseCoopers and Victoria Partners for structuring and fundraising.

The fund has a proposed life term of five years (with two one-year extension options), and focuses on the financing of residential, office/business, retail and hotel properties. The ticket price for institutional investors is €5m upwards.

Curth-C. Flatow, founder of the FAP Group, explained the rationale for the fund at the launch presentation in Frankfurt last week, attended by REFIRE: "There are some debt funds in Europe that could also do business in Germany. Most of these funds, however, have a pan-European focus and have consequently directed their financing conditions to a pan-European market. Due to the market parameters they can only very seldom provide financing conditions that fit the individual German financing market. This is the gap that our fund offer will fill.

"Most recently we've been speaking to American and Asian investors. Even if there are markets, in which a better return on investment could be achieved, there are also very sound reasons for international investors to be invested in the most significant real estate and property market in Europe, namely in Germany.'

Hanno Kowalski, managing director of FAP Invest which will consult on the fund, said: "From the viewpoint of the borrower, we are entering the market with attractive pricing so that we can secure good addresses with good track records and projects. The clear premise for this is: We're not here to finance everyone, but in the interest of our investors to accompany borrowers with an excellent track record and good projects."

FAP was founded in 2005 by Curth-C. Flatow and since then has advised on and structured more than €14bn of traditional debt financing as well as mezzanine finance, equity and capital market products for investors.