Hannover Leasing snapped up by Corestate Capital

What a year it's turning out to be for Luxembourg-based real estate investor Corestate Capital. Barely two months after its finally successful IPO on the Frankfurt Stock Exchange, the company made a series of newsworthy announcements (see subsequent article). The most significant, however, is the acquisition of the Hannover Leasing group from Helaba and HTSB, which had officially put the fund manager on the market barely four and a half months ago.

Corestate is buying a 94.9% stake in the Pullach near Munich-based Hannover Leasing from the majority shareholders Landesbank Hessen-Thüringen Girozentrale (Helaba) and its sister company Hessisch-Thüringische Sparkassen-Beteiligungsgesellschaft (HTSB), while Helaba will remain a minority shareholder with a 5.1% stake. The price paid was only confirmed as "in the low two-digit millions."

Announcing its decision to sell the fund subsidiary in September, Helaba had said the market for closed-end funds had fundamentally changed in the past few years, with demand from retail customers in the doldrums. Together with the intensified regulatory regime for funds, the business was no longer core to Helaba's activities, the bank said.

Those known to have been interested in Hannover Leasing include companies such as Patrizia Immobilien, Zech, Paribus and Assetando. Observers close to the deal suggest that ex-Hannover Leasing boss Friedrich Wilhelm Patt, who retained a 2.66% stake in the fund company, had weighed in heavily in favour of the bid from Corestate.

Assuming that the deal is approved by financial watchdog BaFin within the first half of 2017, as expected, Corestate will boost its assets under management at one fell swoop from €2bn to €16bn.

Hannover Leasing currently employs 140 staff, and offers closed-end investments across all real estate categories. The company is currently led by Michael Ruhl and Marcus Menne. Since its founding in 1981 the company has raised more than €9.9bn from private and institutional investors for over 200 closed-end funds, the majority in real estate, but also in media, life insurance and aircraft vehicles.

Corestate is expected to leave the company largely intact, with its Pullach headquarters and professional staff, which seems to have been a decisive factor in its winning bid. Some of Hannover Leasing's older funds are thought to have complex clauses and conditions attached which might have made it difficult to digest for many buyers, and will certainly have played a role in the low price paid for the company.

Sascha Wilhelm, CEO of Corestate, said: "The acquisition of Hannover Leasing represents an appealing blend of contractually secured, long-term asset management returns and great potential for new business. We are expanding and diversifying our product range and improving our access to new sources of institutional capital."