Germany’s closed-end public AIFs are expected to increase their issuance activities by around €1bn this year, according to rating analyst Scope.
In total, investors pumped around €1.29bn into 64 closed-end public AIFs in 2021, an increase of around 7% compared with the previous year's figure of around €1.2bn. However, the prospectus offering volume of €764m in 2021 marked a decrease of €75m y-on-y, largely due to the smaller volume of funds: no AIF came to market last year with a prospectus equity exceeding the €100m mark. In addition, the current interest rate environment and the further increase in asset prices make it difficult to structure products with an attractive risk-return profile.
Overall, real estate remains the dominant asset class, accounting for around 68% of the equity placed in 2021, or €872m. This is followed by the private equity AIF segment with around €276m, or around 21%. Renewable energy takes the third spot with €78m, or 6%. In addition, the multi-asset category accounted for €53m, or 4%, followed by infrastructure at 1%.
The following top five providers combined a placed equity volume of around €711m distributed across 20 closed-end public AIFs, thereby corresponding to more than half of the total market (55%): Jamestown (€258m, one closed-end public AIF), Wealthcap (€152m, eight closed-end public AIFs), DF Deutsche Finance (€142m, six closed-end public AIFs), Primus Valor (€80m; two closed-end public AIFs) and RWB (€78m, three closed-end public AIFs). Jamestown takes the top spot, accounting for around 20% of the total placement volume in 2021 with a single AIF, “Jamestown 31”. Jamestown, which specializes in US real estate, plans to launch its fund No. 32 in the third quarter of the year.
d.i.i. to boost its exposure to closed-end public AIFs
Other investors getting in on the act include Wiesbaden-based d.i.i. group, which focuses on residential real estate and which has said it intends to boost its exposure to closed-end public AIFs for private investors. It is currently fundraising for its second fund, d.i.i. Wohnimmobilien Deutschland 2, which was launched in September. The third fund in this series is already in the pipeline, with further funds on the cards. The response to the second public AIF with a target investment volume of €40m has been "very good", according to CEO Frank Wojtalewicz. The company has already raised €3.5m for its second fund, which targets private investors and an additional €1.5m has been pledged, according to Wojtalewicz. The minimum subscription amount is €10,000, "although the average subscription size is significantly higher", Wojtalewicz said. The fund term is ten to twelve years.
d.i.i. aims to have collected all the equity by the end of the second quarter this year, after which a follow-on fund with a target investment volume of €55m will be launched. Fundraising is expected to begin in the third quarter, Wojtalewicz said. d.i.i. expects a cash-on-cash return of 4% to 4.5% and an IRR return of 6% to 7% across all funds.
