Category Archives: DJE Real Estate

Portfolio updates: AIRE KGaA, April SA, Cranswick, Dart, Installux

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AIRE KGaA:

For AIRE KGaA, I decided to accept the tender offer at 18.25 EUR per share. There is not a lot of upside left and I guess the stock will be really illiquid after the offer.

Installux

Whereas the built up of Poujoulat goes really really slow, For some reasons, last Friday almost 2.500 Shares have been traded. That’s almost 1% of the market cap. Interstingly, in Bloomber a new fund called “Agicam” showed up at the end of April with a 0.99% position. Due to those sales, I could now already built up a stake of 1.8% of the portfolio in Installux shares, a lot faster than I thought.

DJE Real Estate

The sell down of this position is quite cumbersome. Up to know, I could only sell half of the position so far. However prices are relatively stable.

Dart Group & Cranswick

Both shares were relatively active over the past few days, so I could establish 2.5% positions fopr both. Dart Group issued their “preliminary annual” statement as of MArch 31st, a very good write up can be found here at ExepctingValue.

For Dart I will wait for the final annual report in order to determine if I increase the position to the full amount (5%).

April SA

Since I ahve increased my buying limit for April to 11,50 EUR, I could establish a small position in the stock (0.6% of the portfolio). Of course I got punished and bought ~2% higher than today’s share price……

Cash is now down to around 16.5% of the portfolio, but taking into account the AIRE Tender Offer, Cash is around 21.5% of the portfolio. So plenty of room for 2-3 new ideas…..

Update DJE Real Estate, SEB and CS Euroreal

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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.

Real estate investment funds – SEB Immoinvest and DJE real estate

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Interesting developement with regard to the last two remaining closed real estate funds, CS Euroreal and SEB Immoinvest:

SEB wants to save itself by opening just for one single day on May 7th.

The price of the fund already jumped this morning:

EDIT: The SEB Immoinvest is not in the DJE Real estate fund

It will be interesting to see how this works out on May 7th. To a certain extend I find it relatively unfair, as this move punishes traditional fund savers, which might not know about this or have not enough time to react.

I am not sure, if the SEB Immoinvest itself would be a good special situation right now. According to the details of the “offer” , they will collect all orders from now on.

If the orders are less or equal existing liquidity (30% of the fund), they will pay out all orders, otherwise they will not pay out anything. So no “odd lot” tendering for the small guys, it is just “all or nothing”.

For me it is extremely difficult to assess how many people will redeem, my assumption is that all institutional ones more or less have to submit orders.

At current prices of 40 EUR, the upside would be some 30% whereas the donside would be the old price of around 34-35 EUR. So one has to assume at least a 50% chance of reopening to make this a positive exected value investment.

DJE Real Estate:

As Perlenfischer pointed out in the comments, there is a con call on MAy 7th with regard to further proceedings from DJE. This should be interesting.

Special Situation: DJE Real Estate fund (LU0188853955) in liquidation

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EDIT:I have changed some parts of the Post, especially with regard to the summary and the risk section !!!

Preliminary remark: a reader emailed me this idea, thank you very much. But please don’t forget: This is not meant as an investment advise, please do your own homework !!!! I might own already shares of any discussed inevstment personally and many of the invetsments discussed are relatively illiquid.

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