As in previous years, real estate funds will make up the largest part of new AIF issues in 2020 – the asset class will still feel the economic effects of the COVID-19 pandemic: The prospectus equity volume has fallen significantly compared to the previous year.
In October, the Scope rating agency published an evaluation of the new issues of closed alternative investment funds (AIF) for private investors in the third quarter (Q3) of this year. The data shows how much AIFs are suffering from the effects of the COVID-19 pandemic.
More new issues than in the previous year – yet lower prospectus equity volume
Scope reports that so far more new closed-end real estate funds have been issued in 2020 than in the previous year 2019 – the prospectus equity volume has nevertheless fallen drastically: In Q3, five new funds were sold with a total of around 166 million euros in equity. This corresponds to a decrease of 25 percent compared to the same period of the previous year.
In Q1 to Q3 even a minus of 46 percent was recorded: The total equity volume of the funds is only 590 million euros. For comparison: In 2019 there were several funds with an equity volume of over 100 million euros – numbers that this year can only be dreamed of.
Only one real estate fund breaks the 50 million euro mark
Because: There are more funds than last year, but the equity volume for most funds in the first two quarters was around 25 million euros. It was not until Q3 that the new real estate fund “UST XXV” from US-Treuhand was able to break the 50 million euro mark with an equity volume of 66 million euros.
With “AIW Invest Michelson GmbH”, another US fund was approved by BaFin in Q3 – according to Scope, both together have an equity volume of around 84 million euros, which corresponds to a little more than half of the total equity volume of the newly issued AIFs in Q3 .
Real estate funds clearly dominate the alternative investment funds
Furthermore, a German (“WIDe Fonds 9”; 25 percent of the total equity volume) and a European (“Wealth cap Fondsportfolio Immobilien International 1”; 22 percent of the total equity volume) fund were approved in the third quarter of 2020.
This means that only the multi-asset fund “BVT Conciento Vermögensstrukturfonds 3” is not a real estate fund among the AIFs approved in Q3.
Such a strong dominance of real estate funds could already be observed in the first quarter – here five out of six AIFs were from the real estate asset class. In Q2, seven out of nine newly issued AIFs were real estate funds.
This means that the trend already recorded by Scope in 2018 and 2019 that real estate funds dominate alternative investment funds will continue even during the economic effects of the COVID-19 pandemic.
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