Category Archives: AIRE KGAA

AIRE KGaA – Increase of Tender offer to 18,25 EUR per share, Q1 report and Uncle Sam

What a day again for the AIRE KGaA stock.

As reader AS has commented already, AIG has increased the tender offer again up to 18.25 EUR per share.

To make the situation even more interesting, the Swiss fund Alpine Select filed that they have increased their share holding to close to 17%.

In parallel, AIRE published today the Q1 report 2012 which did not contain any news. Money is still coming back. Interestingly they showed on page 8 that 55% of the portfolio is residential real estate, I assume most of this in the US. Current NAV is around 20 EUR.

One funny aspect of the current situation:

I was quite confused that the US Treasury Department was disclosing a stake in AIRE KGaA, ut the i read this sentence:

These voting rights are to be attributed pursuant to sec. 22 para. 1 sentence 1 no. 1 WpHG via American International Group, Inc., United States of America.

As the US Treasury is still holding the majority in AIG, effectively one can sell now the AIRE shares to Uncle Sam.

I think I will soon start selling the shares as the upside seems to be now relatively limited. at the current price it will e the first real “Double”.

Catching up: Green Mountain, AS Creation and AIRE KGaA Tender offer at 17 EUR

What a week for the portfolio ….

Green Mountain

Green Mountain imploded (again) last week after they lowered their guidance.

Green Mountain had many attributes making it a “perfect short”:

+ shady accounting as revealed early by Sam Antar at WhiteCollarFraud
+ massive insider sales
+ negative free cashflows
+ pumped up growth through expensive acquisitions
+ expiring patents in 2012

David Einhorn, now credited for “revealing” the over-valuation was actually relatively late in the game. However one has to admire his timing capabilities. I was relatively early and hat to swallow a intermediate -40% loss on the position before I got into the money.

The question is now, how low can the stock go ? If GMCR is a “real business”, then the current valuation seems to be fair. If they are a real fraud, the stock could go down much further. Also one should remember that momentum always goes in both directions. Nevertheless, as the easy money on the short seems to have been made, I will exit (cover) the short on Monday.

AS Creation

AS Creation reported surprisingly good Q1 numbers which show that at least with a certain time lag, the company does have some pricing power in its core business. The outlook is mixed as they expect losses when they ramp up the Russian JV.

Nevertheless, I think the first quarter gives credibility to the managment as they always told investors that on an annual basis they are able to pass cost increases onto clients.

AIRE KGaA Tender offer EUR 17 per share

After I was already happy that my special situation investment AIRE KgAA offered to buy back 10% of the shares at 14 EUR, suddenly AIG real estate issues an offer for 17 EUR per share for the whole company.

Luckily, I only sold relatively small amounts of AIRE at around 14 EUR. As someone said before: Sometimes it better to be lucky than smart.

What I find interesting about the offer are two things:

– first, they seem to have already 31.8% of shares under their control, so from their existing 7.85% the have bought 24% through option contracts

– second, based on the official NAV of around 21 EUR, the 17 EUR offer in theory does not leave a lot of upside for AIG. However one has to remember, that AIRE KGaA owns a lot of highly leveraged equity positions in US developements which were pretty aggresively written down to zero over the last few years. So there is lot of positive optionality in the legacy portfolio. If some of those projects are “coming back”, the NAV could be significantly higher. AIG Real estate as the previous manager should know those projects pretty well.

If I remember correctly, they were active in residential, multi tennant developements. Maybe this has to do with AIG’s decission from early April to go back into real estate investments on a larger scale. I had actually read this but didn’t really make the connection.

For the time being, I will wait for the final offering documents to decide what to do, however I will continue to sell down to 5% of portfolio weight.

As Green Mountain was the ideal short, AIRE KGaA was the ideal special situation:

+ unusual vehicle (listed, closed real investment fund, US and Asian real estate, only German listing)
+ difficult to analyse (lot of debt, but non-recourse)
+ bad name / scandal, however no direct exposure (AIG)
+ early entry of “activist” investors (Grevenkamp, Swiss guy)

From a timing perspective, I was very lucky in the portfolio, getting in at a very low point in January 2011. The chart shows that with such investments, one usually has time to analyse and invest. It doesn’t reallypay out to invest driectly after the drop:

After the big drop in 2008/2009, the stock was “sleeping” now for almost 3 years before something happened.

That is something to keep in mind for investing in such situations. I t takes some time until the value will be (hopefully) realised by someone.

AIRE KGaA – annual report published

AIRE KGaA published their annual report 2011 yesterday.

The NAV slightly increased from Q3 2011 to EUR 21.30 per share.

The most interesting news however is to be found on page 5: From the initial 65.6 mn EUR potential investment commitments, only 2.4 mn EUR seem to be now relevant, as most of the other commitments did expire or will expire soon.

At year end 2011, AIRE had almost 22 mn EUR in cash on hand, representing around 5,20 EUR per share. The buyback announced this week, will use only up to 5 mn EUR, so we can expect some further buy backs soon.

So for the time being, despite the insider issues discussed, I think the value of the shares should be strongly protected to the downside.

For the portfolio, I will continue to sell down until a 5% weight is achieved (from ~7%). However, due to the low volume this might take a while.

AIRE KgAA – 10% Buy back tender offer at EUR 14

As one of the readers commented yesterday, one of my special situation investment, real estate investment company AIRE KgAA issued a 10% buy back tender offer yesterday after close.

This is of course good news in general, as this was one of the catalyst events I was looking for.

Based on my initial investment thesis from Decemeber 2010, we are currently at the “mid case” scenario.

However I have some isues with this tender offer:

1) Why was it launches just before the publication of the annual report ? Normally, the annual report came out always on the last day of April. Do they want to fix the price now because there is unexpected good news (e.g. a written off project came back to life) ?

2) In my opinion, there was some serious INSIDER TRADING going on. This is the only explanation for the strange rise of the stock against the general market) in the last few days:

The insider aspect really worries me, as this could also go into the other direction. So my current reaction is to start to exit the position from today, even if this is what AIRE KgAA or its major shareholders are trying to achieve.

The tender offer itself is an “Odd lot” type of offer, with the “odd lot” being 100 shares which will be accepted 100%, above 100% there will be only a partial repurchase based on the total amount tendered.

Quick updates: Praktiker, Buzzi, Aire


Unfortunately, theb ond already went above my limit of 41%. So I was only able to purchase a 1.4% position for the protfolio under my usual restrictions (max 25% of daily volume). I will not increase the limit for the time being.

One additional remark: I got access to the document showing all bond holders which took part in the first round of the vote. I saw no “suspicious” hedge fund participation. It will be interesting to see if they now go into a second round. According to this note of the notary, only 19% of the bondholders participated in the first round


After the encouraging results of Dyckerhoff, Buzzi reported total 2011 results .

The home market Italy decreased significantly, Dyckerhoff reported a total profit of ~60 mn EUR for 2011, Buzzi in total only 26 mn EUR. So net income for Buzzi ex Dyckerhoff was negative.

However, net debt has been reduced almost by the same amount as for Dyckerhoff. For 2012 they were very cautious:

Based on the above considerations, which show emerging economies well set to achieve a further progress in profitability, a stable situation in Central Europe, some opportunities for an earlier recovery in the United States and on-going difficulties in Italy, we can state that at consolidated level the next financial year should close with operating results similar to those of 2011.

It seems that the market had expected a better outlook, from my side however this is a 3-5 year “reversion to the mean” bet and we are only in year 2 now.


For some reason, AIRE jumped significantly in the last few days.

However, I didn’t find any news and volume was relatively small. As I don’t have that many alternative “special situations”, I will keep the shares despite the price slowly approaching fair value.

AIRE KGaA – Q3 Bericht 2011

Ein kurzer Blick auf den Quartalsbericht:

Nach dem Verkauf der Bratislava Immobilie sieht die Bilanz deutlich einfacher aus:

Man hält jetzt folgende Investments:

+ Fonds 37,3 Mio
+ US Direktinvestitionen 34,6 Mio.
+ Cash 20 Mio EUR
-2 Mio EUR Verbindlichkeiten
= 90 Mio NAV oder 21 EUR pro Aktie (4,22 Mio Aktien)

Demgegenüber stehen Investitionsverpflichtungen von:

CUR in CUR EUR k X-Rate
AIG Europe I EUR 1,459 1,459 1
AIG US Res USD 811 601 1.35
Neptune USD 4,114 3,047 1.35
Trivest USD 3,362 2,490 1.35
Invesco Jap II JPY 570 5,429 105
Marina V USD 998 739 1.35
Invesco Jap III JPY 628 5,981 105
AIG Mex USD 6,565 4,863 1.35
Station USD 138 102 1.35
One world USD 11 8 1.35
Pleasanton USD 2,079 1,540 1.35
Millenium USD 1 1 1.35
Invesco Asia JPY 3,675 35,000 105
AIG India USD 3,314 2,455 1.35
Summe     63,715

Man sieht deutlich, dass dies die “Achillessehne” ist.

Im Bericht steht dazu noch, dass das Management davon ausgeht, dass nicht alle Zusagen in Anspruch genommen werden.

Was jetzt eigentlich fehlt is eine Art Cashflowplanung:

Wieviel Erlöse kommen aus den bestehenden Investments zurück und wieviel Geld muss wann noch ausgezahlt werden ?

M.E. ist die Chance, dass von den 20 Mio Cash ein größerer Teil sofort an die Aktionäre fliesst, relativ gering. Es bleibt eine “Geduldsprobe”.

Portfolio transaction update – Einhell & AIRE KGaA


As anounced a couple of days ago, I have been reducing the Einhell position since then.

Due to the low volume of trading and my restriction not to simulate trades greater than 20% of daily volumes, I was only able to sell roughly 2/5 of the position at the VWAP of 34.03 EUR per share. Einhell is now doww to ~1% of the portfolio and will be reduced to 0% going forward.


In parallel, as mentioned here, I continued to build up the AIRE KgAA Position into a “full” position , which means a 5% portfolio share.

Total trading volume since then (20.10.) has been 79.139 shares at a VWAP of 8.17 EUR per share. 20% of that volume results in a purchase of 15.827 shares at 8.17 EUR, increasing the weight of AIRE to 4,6% at a cost of 8,75 EUR per share.

After these transaction, the cash percentage dropped below 10% (9,9%), so going forward I will only increase the AIRE position to the extend Einhell shares can be sold at the same time.

AIRE KGaA – Neuer Aktionär

Eben hat die AIRE folgende Meldung herausgegeben:

Mitteilung nach § 21 Abs. 1 WpHG (Aktie)

Angaben zum Mitteilungspflichtigen:

Name: Urs Meile

Staat: Schweiz

Veröffentlichung gem. § 26 Abs. 1 WpHG

Herr Urs Meile, Schweiz, hat uns nach § 21 Abs. 1 WpHG mitgeteilt, dass sein

Stimmrechtsanteil an unserer Gesellschaft am 1. November 2011 die Schwelle von

3% überschritten hat und zu diesem Tag 3,01336% (127.274 Stimmrechte) beträgt.

Davon sind ihm 3,01336% (127.274 Stimmrechte) nach § 22 Absatz 1 Satz 1 Nr. 1

WpHG zuzurechnen.

Eine schnelle Internetrecherche über Herrn Urs Meile zeigt eine erstaunliche Vielfalt. Nach diesem Link hier ist er anscheinend u.a. an einerm Motorboothersteller, einer Viehzuchtgenossenschaft und einem Medienunternehmen beteiligt, anscheinend hat er auch bei einem Fussballclub, den Young Boys Bern mitgenischt.

Zuletzt hat er sich in der Medizintechnik betätigt.

Früher scheint er CEO bei Charles Vögele gewesen zu sein.

Damit dürften die Hauptversammlungen auch zuküftig interessant bleiben.

Portfoliotransaktionen – Aufstockung AIRE & DEPFA LT2

Wie bereits angekündigt, wurde die vergangenen Tage AIRE weiter aufgestockt.

Das Handelsvolumen war allerdings recht mickrig.

Beim DEPFA LT2 Floater wurden wie angekündigt 500 Tsd Nominal zu 52% gekauft, der Einfachhalt halber weise ich immer den “Dirty Price” also ink. Stückzinsen aus. Kaufpreis inkl. Stückzinsen war 52,22%.

Zur besseren Übersicht anbei die aktuellen Portfoliogewichtungen:

Bezeichnung Gewichtung
Hornbach Baumarkt 5.7%
Fortum OYJ 5.6%
Magyar Telekom 5.0%
AS Creation Tapeten 4.3%
Westag & Getalit VZ 4.2%
Autostrada Milano Torino 5.6%
EVN 3.4%
Walmart 4.1%
WMF VZ 3.7%
Tonnellerie Frere Paris 3.3%
KSB 2.7%
Vetropack 2.7%
Total Produce 5.0%
Frosta 2.7%
OMV AG 2.6%
Sto AG VZ 2.4%
Nestle 2.2%
Einhell VZ 1.8%
Microsoft 2.6%
Drägerwerk Genüsse D 7.4%
IVG Wandler 2.2%
WESTLB 6.9% 5.0%
DEPFA LT2 2015 2.8%
AIRE 3.5%
HT1 Funding 4.3%
Short: Kabel Deutschland -1.3%
Short: Green Mountain -2.5%
Short: Dräger VZ -7.5%
Terminverkauf CHF EUR 0.4%
Tagesgeldkonto 2% 10.6%
Summe 100.0%
Value 75.1%
Opportunity 25.2%
Short -10.9%
Tagesgeld 10.6%

Insgesamt ist das Portfolio jetzt “Netto Long” 90% des Volumens, 25% des Exposures in “Opportunities” und 75% in “Value”. Das ist eigentlich recht nahe am Zielwert.

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