Wealth Management Capital (WealthCap) has partnered German retail property manager IPH as a first step in a new expansion push to lift assets under management to €15bn in five years’ time from around €10bn now.
The real-estate and investment manager owned by Germany’s HypoVereinsbank also plans to add residential property to its portfolio for the first time later this year, broadening its real estate in sectoral terms from its current focus on offices.
WealthCap intends to enter into partnerships and joint ventures with other real estate sector companies in order to facilitate the planned expansion.
Gabriele Volz, chief executive officer of WealthCap told IPE Real Assets: “We achieved a tremendous amount of growth in previous years. For specialised activities, we cooperate with the best partners.”
She said the firm’s entry into new real estate sectors as well as new cities within Germany, was a response to continued low bond yields which are still fuelling demand from both institutional and retail investors for sources of higher investment returns.
Volz said the targeted growth is in line with the 15% annual growth in AUM the manager has had over the last five years.
As a first step in the retail property partnership to take effect on 1 March, IPH, part of the BBE retail consultancy group, is to manage a portfolio of four shopping centres in Chemnitz, Potsdam, Jena und Ulm, which WealthCap already owns via different investment funds.
IPH’s chief executive Joachim Stumpf told IPE Real Assets that apart from being the biggest independent shopping centre manager in Germany, his firm is able to add value for both WealthCap and retail tenants through its expertise around e-commerce and social media use.
“We know about the needs of tenants, for example, in terms of how certain sectors are affected by trends in online shopping,” he said.
Such intelligence was useful when it came to determining rental prices, he said.
“Another point is that our knowledge of social media allows us to make shopping centre marketing more effective,” Stumpf said.
A central part of WealthCap’s growth strategy is to expand its offerings to clients to include residential property investments for institutional investors.
“We are just about to conclude a partnership deal regarding residential investments, but we cannot give any more details about that yet,” Volz said.
“We plan to make our first residential real estate acquisition in the fourth quarter of this year,” she said, estimating the deal is likely to have a value of around €150m.
The investment manager also plans to add to its portfolio strategies with new internationally-invested funds in alternative assets, such as real estate value-add, private equity and infrastructure.
“We have infrastructure investments now, but not as directly-held assets,” she said, adding that all WealthCap’s infrastructure offerings for clients are in the form of fund of funds.
However, WealthCap will expand its infrastructure business by extending its client base from retail investors currently to institutional investors, trusts and family offices in the future, Volz said.