• Target volume of 300 million euros, five million euros minimum subscription amount
• Focus on funding ESG transformations of existing building stock
• Classified as Article 8 fund pursuant to Sustainable Finance Disclosure Regulation

Stuttgart, 16 July 2024 – BF.capital GmbH, an investment house for institutional investors in the private debt segment, just started its fundraising drive for another real estate debt fund. The fund, called BF.capital Real Estate Debt Fund II, aims for a target volume of 300 million euros or more. The average distribution target is approximately six percent, as is the net return. Structured as a Luxembourg SICAV-RAIF, the fund has an eight-year term, plus two renewal options of one year each. The fund is aimed at institutional investors and requires a minimum investment amount of five million euros. It is classified as an Article 8 fund according to the EU’s Sustainable Finance Disclosure Regulation (SFDR).

The fund will invest exclusively in whole loans or senior loans. At least 80 percent of the fund volume will go toward loans for standing properties with value-added potential. “Here, we are targeting mainly manage-to-core or manage-to-green investments, e. g. by repositioning properties, by repurposing them for alternative use, by adding extra floors or through infill densification. When selecting projects, we will take both environmental aspects and our social responsibility into account. In terms of use classes, investments will focus on residential, community-related uses and social infrastructure,” explained Manuel Köppel, Managing Director of BF.capital. As an add-on option, the fund will also invest in financing arrangements for ESG compliant property developments with market-adjusted parameters, although these are not supposed to make up more than 20 percent of the fund volume.

“Newly launched real estate debt funds offer great opportunities for anti-cyclical investments, especially in the current market cycle. That is because, for the time being, you can earn relatively high current yields on real estate loans – which combine with moderate loan-to-value ratios and market-adjusted value measurement approaches. This creates investment opportunities with an excellent risk-return ratio,” as Köppel went on to say.

Pascal Scheeff, Head of Sales at BF.capital, added: “Real estate debt funds offer something that direct real estate investments have a hard time delivering at the moment: Investors get to benefit from the higher level of interest rates plus from the higher credit spreads while also getting to invest in the real estate sector at the same time. Real estate debt can be a valuable building block when seeking portfolio diversification, not least because of the stable payout expectations. Moreover, real estate debt offers an attractive illiquidity premium, resulting in a better risk-return profile than comparable liquid fixed-income investments.”

BF.capital is placing the fund with the assistance of Placecap, a fundraising specialist who considers this solution an exiting investment focus – given that it involves an asset manager well networked within the German market.

At present, BF.capital has c. 500 million euros in assets in the real estate debt segment under management. This compares to more than 1.5 billion euros in total assets under the management of BF.capital, including corporate and infrastructure financing.

• BF.capital expands its existing asset class focus on real estate debt to include corporate and infrastructure financing, thus becoming a one-stop provider of private debt solutions
• Manuel Köppel, the Managing Director, will be joined by Eugenio Sangermano and Berthold Garbas who will transfer from W&W Asset Management into the senior management of BF.capital
• BF.capital’s assets under management will exceed 1.5 billion euros
• Francesco Fedele, CEO of BF.direkt AG, to chair the newly created supervisory board of BF.capital

Stuttgart, 27 September 2023 – As of 2 October 2023, W&W Asset Management GmbH has acquired a 35-percent interest in BF.capital GmbH, a subsidiary of BF.direkt AG and an investment house for institutional investors in the real estate debt segment. By taking aboard this company, which is a subsidiary of Wüstenrot & Württembergische AG (“W&W”), BF.capital will expand its service spectrum, specifically by adding corporate debt and infrastructure debt solutions. It thus covers all relevant categories of the private debt asset class. Up to now, BF.capital has been active exclusively in the field of real estate debt. Going forward, assets under management will exceed a total value of 1.5 billion euros.

In conjunction with the transaction, BF.capital also filed an application for a license under the German Securities Institutions Act (WpIG) that would authorise it to use fund-of-fund structures and separate accounts to make private debt solutions available to third-party investors outside the W&W Group. Products intended for this purpose are being prepared parallel to the preparations for a new real estate debt direct lending fund that will be put on the market shortly. With this strategic investment, W&W Asset Management is opening up selected activities for third-party business and accessing new profit pools for the W&W Group in the area of alternative investments.

The onboarding of W&W Asset Management as new shareholder will also prompt an expansion of BF.capital’s senior management. Eugenio Sangermano and Berthold Garbas, who are both transferring from W&W Asset Management to BF.capital, will join incumbent Managing Director Manuel Köppel to lead BF.capital. In addition, BF.capital is setting up a supervisory board. It will be chaired by Francesco Fedele, the CEO of BF.direkt AG.

Francesco Fedele, the CEO of BF.direkt AG, commented: “The idea behind selling an interest in the company to W&W Asset Management is to put BF.capital on a broader basis and thereby to create a full-service provider for all relevant private debt segments. This step lets us use the corporate debt and infrastructure debt segments to enter areas that show substantial overlaps and synergies with real estate debt. In the W&W Group, we have found a powerful partner for new products. In addition, we intend to keep growing in the real estate debt segment.”

Alexander Mayer, the CFO of the W&W Group and the Managing Director of W&W Asset Management, stated: “We are aware of major opportunities in the area of private debt, and look forward to being able to contribute our internal know-how to BF.capital, and thus to make it available to third parties, too, in the longer term. The BF Group is the perfect partner for us, because it is independent and neutral, and because it is part of a broad-based network, especially in the real estate sector.”

Manuel Köppel, the Managing Director of BF.capital, added: “We face the future with a great sense of optimism not just in the area of real estate debt but also in regard to the private debt asset class as a whole. Once the repercussions of the interest rate shock for portfolios have been addressed, which takes longer in the case of illiquid asset classes than it does with liquid instruments, investors stand to benefit from the fact that lending parameters have shifted in their favour.”

Eugenio Sangermano said: “I’m looking forward to my new job as managing director of BF.Capital. It will give me an opportunity to employ my expertise in the areas of private debt and infrastructure debt, and to connect these up with real estate debt. The equity investment by W&W Asset Management has benefits for all sides, meaning for BF.capital, for the W&W Group and even for our clients.”

Berthold Garbas added: “The structures we found in place at BF.capital were highly professional. I’m excited about the opportunity to put my long-term experience to work in order to help develop the company for the regulated sector and to scale up its business.”

• Funds are earmarked for land acquisition financing in Berlin and the Rhine-Main region
• First tranche of a 300-million-euro mandate by a major insurance company
• LTV ratio of 75 percent for the two land financing deals
• Borrowers are the developers Pantera and NORSK Deutschland AG

Stuttgart, 21 September 2020 – BF.capital GmbH, an institutional investment house in the area of real estate financing debt, just granted the first two financing arrangements within the framework of its mandate by a major German insurance company. The mandate adds up to a total amount of 300 million euros. Together, the two whole loans total c. 50 million euros. Both will be used to acquire development plots. The arrangement secures the funding for the time until the development rights have been secured. The loan-to-value (LTV) ratio is about 75 percent in either case. Recipients of the two loans are the property developer Pantera AG based in Cologne and property investor and developer NORSK Deutschland AG based in Frankfurt.

One of the properties is located in Berlin. Ideally, the property is to be developed with buildings for medical facilities and associable infrastructure such as clinic-related accommodation. The second building plot is located in the Rhine-Main metro area. The plans here call for the development of residential units supplemented by subsidised housing construction.

Manuel Köppel, Managing Director of BF.capital, elaborated on the background: “The two projects nicely illustrate a typical situation for the use of whole loans: the acquisition of plots whenever the building-law situation is still awaiting further development in order to leverage additional potential. An important criterion for us is that we must have reason to assume that the sought development rights will indeed be granted—for example, on the evidence of an issued planning consent—so that the definitive prerequisites for the exit and the repayment of the borrowed funds before the end of the financing term are in place.”

Jan von Graffen, Managing Director of BF.capital, added: “The two examples show how attractive real estate debt investments are for institutional investors. They permit short-maturity property investments with an attractive coupon.”
Manuel Köppel also touched upon the current situation: “Classic banks have become more reticent during the coronavirus crisis – even with sound projects. This opens up opportunities for us as alternative financiers. Assuming suitable financing situations, whole-loan structures let us go as high as 80 percent of the market value, whereas conventional real estate lenders are often limited to lower gearing ratios by statutory and by their own internal mortgage lending requirements.”

• von Graffen to head the company together with Manuel Köppen in future
• His sphere of ownership includes specifically institutional investor sales
• BF.capital intends to bring its AuM up to 1 billion euros over the next year or two

Stuttgart, 5 May 2020 – BF.capital GmbH, an institutional investment company in the real estate debt sector and part of the BF.direkt AG conglomerate, has appointed Jan von Graffen (44) as Managing Director. Jan von Graffen has worked for BF.capital since 2019, and in his new role will continue to be responsible for institutional investor sales and for the institutional relationship management. He will collaborate with founding Managing Director Manuel Köppel, who will continue to be responsible for the investment arm, i.e. for the examination and organ-isation of lendings and for the portfolio management. Francesco Fedele, who has so far served as managing director of BF.capital as well, will leave the company’s senior management in order to devote himself full-time to his activity as CEO of BF.direkt AG, and in this context will concentrate on the management of real estate clients and the banking network.

Jan von Graffen, the incoming Managing Director of BF.capital, commented: “I feel very hon-oured by the appointment as Managing Director, and would like to thank Manuel Köppen and Francesco Fedele for the faith vested in me. One of my central tasks will be the fund-raising for our real estate debt fund. The fund is supposed to invest both in senior-secured and mez-zanine financing schemes, and thus to permit value creation in the context of property devel-opments.”

Manuel Köppel, Managing Director of BF.capital, said: “Jan van Graffen recently played a de-finitive role in our successful acquisition of a large mandate for setting up a whole-loan portfolio. Representing the account of a prestigious insurance company, the mandate is worth 300 mil-lion euros so far. Jan von Graffen brings 16 years of professional experience with major insti-tutional investors to the job, and is perfectly familiar with the needs and decision-making pro-cesses of this investor group. He is the optimal person to assist us with the further expansion of our company.”

In addition to its proprietary real estate debt fund and the whole-loan mandate, BF.capital GmbH offers additional investment opportunities in the real estate debt asset class to institu-tional investors, especially mortgage-backed promissory note loans. At this time, BF.capital has c. 400 million euros in assets under management in the real estate debt segment. “In conjunction with the initial investment phase of our whole loan mandate and the real estate debt fund, we intend to expand the assets under management to 1 billion euros over the next year or two,” as Köppel elaborated.

Jan von Graffen joined the company as Managing Director on 01 July 2019. As an expert with a proven track record in the area of institutional investments, he is superbly networked within the target group. Before transferring to BF.capital, he served as head of the fixed income/cash core division of the Alte Leipziger – Hallesche group. In this role, he managed assets in a total volume of 27 billion euros. Moreover, he played a definitive role in the strategic and tactical orientation of the portfolio. Previous career stations included the Continentale insurance group and Süddeutsche Krankenversicherung a.G., where he spent more than eleven years, most of them in senior positions.