Assets under Management increase to Euro 20bn, purchase price for HFS in the mid three-digit million range, guidance for financial year 2017 raised, adjustments within the Executive Board and Senior Advisory Circle.
CORESTATE Capital Holding S.A. (CORESTATE), a fully integrated investment manager and co-investor based in Luxembourg, acquires HFS Helvetic Financial Services AG (HFS), based in Wollerau (Switzerland), and successfully integrates Hannover Leasing Group (HL).
HFS is a leading provider of mezzanine financing in the German residential and commercial real estate market and also sub-advises numerous funds. HFS has been one of the first companies to identify the significant potential of mezzanine financing and already launched a related fund in 2009. With the acquisition of HFS, CORESTATE expands its value proposition to include mezzanine real estate financing, grows its fund business and improves access to institutional investors such as pension funds and insurance carriers.
HL is a leading asset manager and provider of real asset investments in Germany and offers closed-ended mutual AIFs (alternative investment funds) as a registered capital administration company (Kapitalverwaltungsgesellschaft). Since its foundation in 1981, HL has been focusing mainly on domestic and international property investments as well as on alternative assets. The takeover of HL brings an attractive combination of contractually secured long-term asset management revenue and significant new business potential.
Broader product spectrum
As a result of the transaction, CORESTATE will become a leading listed asset and investment manager with a focus on real estate equity, debt and alternative assets in the German-speaking region. Upon closing of the two transactions, the assets under management (AuM) of CORESTATE will grow to Euro 20 billion. CORESTATE has over 470 employees in 29 offices across six different countries globally.
The combination of the three networks will result in a significantly strengthened asset and investment management platform with an impressive track record: together, the three companies have been raising Euro 12 billion in equity from investors in the past. CORESTATE will benefit from an extended product offering, an improved access to capital and higher recurring revenues.
“CORESTATE will continue to drive the consolidation since both the need and potential in our industry are significant. The newly increased and diversified CORESTATE offers an excellent platform for additional well-chosen acquisitions,” says Ralph Winter, founder and senior advisor of CORESTATE.
Transaction financing including via capital increase against non-cash contributions
The acquisition of HL will be financed out of company funds. The purchase price for HFS in the mid three-digit million range will be financed by the issuance of 7.4 million new shares in exchange for non-cash contributions from the authorised capital to HFS shareholders as well as by debt capital and own funds.
Guidance for 2017 raised
In view of the acquisitions and a positive market outlook, CORESTATE raises its guidance for the ongoing financial year 2017. Net income before one-off items increases from Euro 36-37 million to 85-90 million. The revenue basis will become both broader and more stable. Going forward, 90% of revenues will be recurring in nature.
Adjustments within the Executive Board and Senior Advisory Circle support the integration process
CORESTATE has made important additions to its management team in order to drive the integration of the acquired entities, adjust governance to the new size of the company and continue to fully live up to its role as an active consolidator.
Thomas Landschreiber, co-founder and chief investment officer of CORESTATE will join the boardroom of HFS alongside Norbert Ketterer (chairman of the board) and Marcellino Graf zu Hoensbroech.
Lars Schnidrig (44) has been appointed chief financial officer (CFO) effective 1 July. Over the past eight years, Lars Schnidrig, has been head of finance and treasury of the DAX 30 listed company Vonovia SE. Prior to that, he worked for about eight years in international investment banking at HypoVereinsbank and other banks in the cities of London, Paris, Dublin, New York and Munich.
“With Lars Schnidrig, we were able to bring on board a multiple award winning capital market expert who will further accelerate our growth based on his integration experience in fast-growing companies and his capital market expertise,” says Micha Blattmann, chairman of the CORESTATE supervisory board.
After nine years as CFO of CORESTATE, Daniel Schoch will depart from the board of CORESTATE by mutual consent; he will, however, continue to support the business as senior adviser.
“CORESTATE owes Daniel Schoch a great debt of gratitude and appreciation. During the initial stages, he created the financial prerequisites without which CORESTATE would have been unable to expand. He has been instrumental in CORESTATE’s development into a leading European real estate investment firm,” comments Ralph Winter.
In addition, Gregory Gould will strengthen the CORESTATE team as a senior adviser for analysis and strategic development in the capital markets. Gregory Gould was a managing director at Goldman Sachs until 2006 and Co-Deputy Business Unit Leader of the firm’s Global Technology Research Group in New York. He was involved in fundraising activities and transactions totalling more than USD 50 billion. Gregory Gould worked closely with the company’s investment banking division on transactions with companies like MasterCard and Accenture. Gregory Gould is an alumnus of the Massachusetts Institute of Technology (MIT).
About CORESTATE Capital
CORESTATE is an investment manager and co-investor with around € 28 billion in assets under management. The company sees itself as a manager for the entire length of the real estate value chain. Thanks to its fully integrated real estate platform, it is able to offer investors a wide range of services, especially the opportunity to invest in large-scale societal trends such as urbanisation, demographic shifts or sustainability – trends that will continue to have a decisive influence on the living and working environment in the long term. The consistent focus on asset classes that will be successful in the long run constitutes a central cornerstone of the company strategy. At CORESTATE, all concepts are supported with ESG expertise that is unique to the industry. With some 800 experts, CORESTATE offers clients and investors a full range of services and consultation from a single source, from project financing and real estate management to sales. CORESTATE is listed on the Frankfurt Stock Exchange (SDAX) and operates as a respected business partner for institutional and semi-institutional investors as well as high-net-worth private investors in 13 countries across Europe, with offices in Frankfurt, Vienna, Zurich, Paris, Madrid and London.
Forward-looking statements
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