DJE Real Estate
Thanks to a friend a received the link to the recording including the slides.
Most important points:
– cash payment of ~17-20% of NAV in Juli (1.30-1.50 EUR)
– however overall cash flow to fund holders much slower than initially thought
In the original post I wrote the following
A) around 2/3 of the fund’s investments (based on NAV) are relatively liquid. It should be no big problem for DJE to return 5 EUR or more within the next 12 months or so. This would mean that at current prices, the investment itself should flow back pretty soon and the discount to intrinsic value could decrease equally soon
This seems to be have been overly optimistic. As far as I understood, a couple of funds have extension options from the side of the fund and some of the still open funds need at least 12 months notice to get the money.
According to management, the secondary market for those funds seem to be very illiquid with large discounts.
So for the portfolio, I will start selling the fund from today on, as my investment case which implied signifcant cash flows in the next 12 months does not really hold.
SEB & CS Euroreal
As now already widely known, the SEB has closed for good beginning of last week.
The CS Eurreal is trying its luck now with Monday, May 21st as the last day where investors can ask for redemptions.
Current price action and price to NAV for the CS indicates a very low propability of reopening:
So potential real estate buyers will see a large pipeline of real estate offers from all those funds with sometimes quite similar objects.
One thing which is interesting is that as far as I know, the funds do not really have to sell all obejcts within the communicated timeframe (i.e. SEB 5 years, AXA 3 years). If they don’t manage to sell, the deposit bank has to take over.
As the deposit banks most likely will not want to be involved in those cases (there will be a wall of law suits along the way) they most likely will directly auction off the properties.
So the end could be quite ugly in the worst case. On the other hand, if prices fall further, the run off funds could become interesting again.
value and opportunity 