Frankfurt firm Albulus launches second property credit fund

The firm will aim to raise €250m for the vehicle, Albulus Credit II, with a focus on refinancing maturing loans in Germany and Austria.

Frankfurt-based investment management firm Albulus has launched its second real estate debt fund, Albulus Credit II, looking to raise €250 million from institutional investors.

The manager’s strategy for its second fund will follow that of its predecessor, maturing commercial real estate loans that are secured by first-ranking mortgages. Unlike the first vehicle, ACII will also include investments in Austria, expanding its lending outside Germany.

An industry source close to the firm told Real Estate Capital Europe the manager has launched ACII because it has seen strong demand from borrowers to get their “runway extended” at a slightly higher interest rate. This will allow for “mezzanine-like” returns for senior-secured real estate loans, the source added.

Market participants have recognised the need for capital for refinancing maturing loans in the coming months and years. In January, manager AEW Europe reported a refinancing shortfall of an estimated €51 billion in the UK, France and Germany for 2023-25, due to faster than anticipated declines in collateral values resulting in lenders making even less capital available to borrowers at refinancing.

Albulus will provide loans ranging between €20 million and €30 million, at between 50 percent and 80 percent loan-to-value. It will aim for a 7.5 percent net return for its investors.

Albulus, which launched in 2011, transitioned into a fund management business in 2017 after launching its maiden vehicle. Its first fund closed in 2019 on €130 million. It is understood that this vehicle is fully deployed.

The firm also manages three customised investment mandates on behalf of one international investor and two German investors, targeting investments in non-performing real estate loans in Germany. This is understood to be investment mandates/funds with a total equity commitment of €330 million.

In Q4 2022, the business advised on a €30 million financing of a residential portfolio in Northern Germany.

Albulus was founded by former DTZ Investment Advisers’ managing director Ruprecht Hellauer. He started his career as a property developer at Hines Berlin, also co-founded Lohnbach Investment Partners in 2004. The firm served as a German-focused NPL investment platform for Soros Real Estate Investors. The platform, together with a Japanese bank, invested more than €2 billion in distressed real estate loans.