Pallas Capital High Yield R.E. SICAV
For Investors
Investment objective
The Pallas Capital High Yield R.E. SICAV is an alternative investment fund under Liechtenstein law that provides mezzanine capital for selected real estate projects.
The product is aimed exclusively at professional investors and is suitable as a diversification and yield-building component for existing asset allocation.
Long-term oriented investors benefit from the diversification effect of the investment, as well as from an attractive risk-return ratio.
For further information, please send us a direct inquiry for a non-binding product presentation.
Key Facts
- Alternative investment opportunity
- Investing from EUR 500,000.
- Attractive return on investment
- Diversified Investment
- Confidential and discreet handling
The Economic Background Of Mezzanine Financing
High equity requirements for project developments.
Equity has always been a central topic in the real estate industry. Project developers usually work on multiple developments simultaneously, and the equity invested in the project is typically tied up until completion and successful marketing. This can lead to liquidity shortages if the project developer wants to initiate a new project but does not have sufficient equity. Due to the more restrictive lending under Basel III and the increasingly risk-averse nature of banks, the equity requirements for project developers have risen again in recent years, which could lead to financing gaps in the future.
Mezzanine capital strengthens the equity capital.
Mezzanine financing fills this financing gap. This form of financing is usually positioned between equity and debt, as the name suggests. Due to its equity-like character, mezzanine capital is usually classified by banks as equity, making it easier to secure traditional project financing. There are also structures where, from the perspective of the financing bank, the mezzanine capital represents the entire equity portion, and therefore the project developer does not have to provide its own capital. However, with such an approach, the project developer may face higher financing costs and may need to provide third-party collateral.
Flexible financing format where the developer retains regular control.
Mezzanine financing is an extremely flexible form of financing. Depending on the capital provider’s strategy, it can either involve passive financing activity with attractive capital returns, or the capital provider can also actively take on or mediate functions. In the first variant, project management remains completely with the experienced developer. The second variant can be a great advantage for property developers, especially in difficult projects or in previously unknown markets, as the investor brings on board the missing expertise and strengthens the project not only at the capital level.
Against this background, mezzanine capital is typically subordinated to the additional capital provided by banks. Due to the higher risk of default in the event of the borrower’s insolvency, the interest components are significantly higher in favor of the mezzanine capital provider than those of traditional bank loans. The lower the equity position and the market potential of the financed property, the higher the risk premiums will be from the perspective of the mezzanine capital provider.
FAQ
To which investors is the fund targeted?
The fund is targeted towards professional investors as defined in Directive 2014/65/EU (MiFID II) or other eligible investors according to the fund’s documents.
Who is a professional investor?
A professional investor has sufficient experience, knowledge, and expertise to make investment decisions on their own and assess the associated risks appropriately. For more information, please see Section 66f of the 2018 Securities Supervision Act.
What is the minimum investment amount?
EUR 500.000,00.
What investment strategy does the fund pursue?
The fund invests in mezzanine capital for selected real estate projects.
What value can the fund bring to investors?
For professional investors, the fund offers an exciting investment opportunity with sustainable returns in times of low interest rates, making it suitable as a diversification and return component for existing asset allocations. Risk warning: Past performance is not a guarantee of future performance. Investing in the Pallas Capital High Yield R.E. SICAV involves increased risk, for more information please refer to the fund’s constitutive documents.
In which countries does the fund invest?
The fund invests in countries within the EURO area, with a focus on Germany and Austria.
In which asset classes does the fund invest?
The fund invests in residential, operator, retail, and commercial real estate.
What is the duration of the fund?
The fund is not time-limited (open-end fund type).
What is the duration of the projects in which the fund invests?
Generally, the projects have a duration of 6 to 36 months.
What is the targeted return for investors?
Approximately 8-10% p.a.
What is the cost structure of the fund?
Costs borne by the fund are approximately 2% p.a. (depending on the fund volume; estimate) + performance fee.
How can I invest?
Investing in the fund can be done through any securities account. Our team is always available to answer any questions.
What are the termination options for investors?
Termination is possible on every valuation date (monthly valuation) with a one-year notice period.
Is the fund regulated?
Yes, as an AIF (Alternative Investment Fund) according to Liechtenstein law, in the form of an investment company with variable capital (SICAV), the fund is supervised by the Liechtenstein Financial Market Authority.
Who is the portfolio manager (AIFM)?
ONE Funds AG
Who serves as the custodian for the fund?
The AIMFG requires a separation of the administration and custody of fund assets. The SIGMA BANK AG is appointed as the custodian, responsible for safekeeping the assets and maintaining the share register.
What is the role of PALLAS CAPITAL Real Estate GmbH?
PALLAS CAPITAL Real Estate GmbH acts as the initiator and specialist advisor to the fund.
What is the track record of PALLAS CAPITAL Real Estate GmbH?
We would be happy to provide you with a detailed track record presentation if needed.
Where can I find detailed information and documents on the fund?
All documents related to the fund are available free of charge through ONE Funds AG.
Disclaimer
This publication serves exclusively as a marketing communication pursuant to § 49 WAG 2018 and does not constitute an offer, an invitation to offer, or a public advertisement for the purchase or sale of investment or other specific products. This information does not provide guidance for economic, legal, tax, or other advisory questions, nor should investment or other decisions be made based solely on this information. Consultation with a qualified specialist is recommended. Investors should be aware that the value of investments can both rise and fall, and that past performance is no guarantee of future performance. PALLAS CAPITAL Real Estate GmbH disclaims any liability for losses or damages of any kind – whether direct, indirect, or consequential – resulting from the use of this publication. This publication is not intended for persons subject to a jurisdiction that prohibits the distribution of this publication or requires a permit. All documents related to the fund are available free of charge through ONE FUNDS AG, Schaaner Strasse 27, FL-9487 Gamprin-Bendern, as well as electronically at www.onefunds.li.