The Bonn-based IVG Immobilien AG, which recently filed for protected insolvency for its parent company, took the decision this week to put a hold on all new business at its IVG Private Funds subsidiary, citing a decline in demand for closed-end real estate funds and changed legal structures, which had led to a lack of long-term profitability in the division.
IVG stressed that the management of the existing funds, in particular the EuroSelect range, which control assets under management of about €3.4bn on behalf of 63,000 individual investors, will continue as normal. The institutional fund business of IVG Institutional Funds GmbH is also not affected, a spokesman said.
IVG filed for protected insolvency on August 20th and entered a form of Chapter11-style self-administered restructuring on about €4bn in debt. After a number of last-ditch attempts to gain creditor acceptance of its restructuring plans, IVG said the insolvency filing became unavoidable after creditors failed to agree on any of its proposals.
Meanwhile, IVG’s board strongly denied reports in the business magazine Wirtschaftswoche that the company was in negotiations with Qatari interests about selling its two prestige projects The Squaire at Frankfurt Airport and The Gherkin in London. IVG holds The Squaire on its own books, a project whose delays and massive cost overruns have contributed in no small measure to the company’s current woes. The 50% stake in the Gherkin is held by IVG as a closed fund in its EuroSelect range of funds.
