Commerz Real Merges its “hausInvest” Funds

Commerz Real will merge its two open-ended real estate funds, “hausInvest europa” and “hausInvest global”. The background to the decision includes market- and portfolio strategy considerations that take the shifted economic parameters and the changing needs of investors into account. In several ways, merging the hausInvest products will put them on a far broader basis that is intended to cushion the developments in individual markets or industries more comprehensively. Specifically, the merged funds will cover more economic regions, optimise the structuring of the real estate types of use, and show a much wider tenant spectrum.

Fund volume of more than 12 Billion Euros

The two funds “hausInvest europa” and “hausInvest global” will be merged by 30 September 2010. The merger will create Europe’s largest open-ended real estate fund by far, with a volume totalling approximately 12 billion euros. On the basis of the current figures, the portfolio will include 125 high-end commercial properties in 19 countries. The real estate is to 87 percent located on the stable markets of Europe, 13 percent in the economically thriving regions of Asia and North America.

The new portfolio structure essentially mirrors the orientation of the new fund, that after the merger will operate under the name “hausInvest.” The stable development of Europe – so far the foundation of the “hausInvest europa” fund that was launched in 1972 – will account for no less than 85 percent of the merged fund and constitute the key component of its investment strategy. Commitments outside Europe, brought in through the portfolio of the “hausInvest global” fund that was launched in late 2003, will not exceed a 15 percent share.

For “hausInvest europa”, the fund merger represents a consistent redevelopment of its investment strategy track record, and thus implies the possibility to operate on the international real estate markets with yet more flexibility in the future. For “hausInvest global”, the fund merger provides the chance to exploit extra-European growth potential within the framework of a real estate portfolio characterised by an optimised risk/reward profile.

Investors of either “hausInvest” Fund Stand to Benefit from the Merger

“In regard to open-ended real estate funds – and thus to the merged ‘hausInvest’ fund, too – it is safe to say: The larger the fund volume and the wider the diversification of the real estate by various criteria are, the lower will be the relative ramifications of temporary market events, and the more autonomous that fund will be in its activities,” said Erich Seeger, Member of the Board of Commerz Real AG and in charge of fund sales. “The merger of the two ‘hausInvest’ funds will make the best of two worlds available to our investors. We will combine the stability of a comprehensively diversified real estate portfolio marked by a European focus with an expanded opportunity potential that arises from the addition of a global component. This will give all “hausInvest” investors a chance to benefit from global growth perspectives without abandoning the European stability aspect.”

Stable Liquidity Situation

The fund merger will be executed on a sound liquidity basis. In the case of “hausInvest europa,” the liquidity ratio currently equals 27 percent, and 12 percent in the case of “hausInvest global.” This means that the statutory requirements are substantially exceeded by either fund. At the same time, developments of recent years have shown that funds with a predominantly global orientation of the investment policy may show a greater degree of volatility. In certain phases, this can limit the structuring options of the portfolio control and of real estate acquisitions.

Endowed with 3 billion euros at the moment, that is, a liquidity ratio of 26 percent, the merged fund will have an outstanding liquidity basis. Combined with a wider investment spectrum, this will create the necessary prerequisites for dedicated and flexible future activities on any potential target market.

Simultaneously, the merged fund will keep sufficient liquid capital on hand to enable investors to access their savings whenever they choose. Owing to their sound liquidity management, the “hausInvest” funds have remained, and will continue to remain, open for share redemptions.

Swapping Fund Shares Free of Charge

No action is required on the part of investors in the context of the fund merger. The depositary bank will take care of everything. Neither will the fund merger incur any costs for investors. All expenditures arising in connection with the merger will be paid by the capital investment company. Transferring the “hausInvest global” share in the new “hausInvest” fund will not be considered as sale followed by acquisition, and will therefore have no fiscal ramifications for our investors. Shares in “hausInvest global” can still be acquired up to and including 24 September 2010. Shares in “hausInvest europa” and of the merged fund will be redeemed any time, those of “hausInvest global” up to the time of the merger. Agreements within the framework of existing saving and disbursement schemes will remain unaffected by the fund merger. They will transfer unchanged to the merged fund.