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Our PALLAS CAPITAL High Yield R.E. SICAV Fund

The investment goal

The investment objective of Pallas Capital High Yield R.E. SICAV is to create an efficient participation opportunity in the professional financing of real estate project developments for the long-term oriented investor.

 

Pallas Capital High Yield R.E. SICAV is an alternative investment fund under Liechtenstein law, which provides mezzanine capital for selected real estate projects.

 

The product is aimed exclusively at professional investors and offers itself as an admixture and yield component for the 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 request for a non-binding product presentation.

*Every investment involves opportunities and risks.

 

Regarding opportunities and risks associated with an investment in Pallas Capital High Yiel R.E. SICAV, please refer to the relevant notes in the fund documents

~ 30 Mio

Assets Under Management 

~ 300 Mio p.a.

Transactions settled Average

3 Jahre +

Track-Record

Key Facts

  • Alternative investment opportunity

  • Invest from EUR 500,000.00

  • Attractive return

  • Diversified investment

  • Confidential and discreet handling

Schachbrett

The Economic Background of Mezzanine Financing

High equity requirements for project developments

Equity has always been a key issue in the real estate industry. Project developers usually work on several developments in parallel, with the equity employed in the project usually tied up until completion and successful marketing. This can lead to liquidity bottlenecks if the project developer wants to initiate a new project but does not have sufficient equity. Due to the more restrictive lending practices under Basel III and the increasing risk aversion of banks, the equity requirements for project developers have risen again in recent years, which may lead to financing gaps in the future.

Mezzanine capital strengthens equity

Mezzanine capital steps into this financing gap. As the name suggests, this form of financing is usually located between equity and debt. Due to its equity-like character, mezzanine capital is generally classified by banks as equity and therefore facilitates the conclusion of traditional project financing. There are also structures in which the mezzanine capital represents the entire equity portion from the perspective of the financing bank, and therefore the project developer does not have to raise any capital of his own. However, with such an approach, the project developer must expect higher financing costs and may have to provide third-party collateral.

Flexible form of financing in which the developer retains regular control:

Mezzanine capital is an extremely flexible form of financing. Depending on the strategy of the capital provider, there can either be passive financing activity with attractive interest on the capital, or the capital provider can also actively take on functions itself or act as an intermediary. In the first variant, project management remains entirely with the experienced developer. The second variant can be a great advantage for developers, especially in difficult projects or in previously unknown markets, as the investor brings the missing expertise on board and thus strengthens the project not only at the capital level.

Against this background, mezzanine capital is regularly 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 in favor of the mezzanine capital provider are significantly higher than those of classic bank loans. The lower the equity position and the marketing potential of the financed property, the higher the risk premiums will be from the perspective of the mezzanine capital provider.

Disclaimer

This publication serves exclusively as a marketing communication within the meaning of Section 49 WAG 2018 and does not constitute an offer, an offer or a solicitation of an offer, or a public advertisement for the purchase or sale of investment or other specific products. This information does not constitute decision-making aids for economic, legal, tax or other advisory issues, nor may investment or other decisions be made solely on the basis of this information. Advice from a qualified professional is recommended. Investors should be aware that the value of investments can go down as well as up. Positive performance in the past is therefore no guarantee of positive performance in the future. PALLAS CAPITAL Raising GmbH disclaims, without limitation, all liability for any loss or damage of any kind, including any direct, indirect or consequential damages, which might be incurred through the use of this publication. This publication is not intended for persons who are subject to a legal system that prohibits the distribution of this publication or makes it dependent on a permit. All documents of the fund are available free of charge at ONE FUNDS AG, Schaaner Strasse 27, FL-9487 Gamprin-Bendern as well as electronically at www.onefunds.li.

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