A Broad Selection of Tailored Financing
The Ernst Russ Group operates as a fully-integrated asset manager in all segments. This means that attractive projects in a wide range of asset classes are identified and evaluated. They can subsequently be presented to a suitable group of investors and customised financing can be structured. In the Alternative Investments segment we manage a wide variety of different products, some of which we would like to discuss in greater detail below.
HCAM has taken over the business management of two Boeing 777-200 LR which are used for long-haul passenger flights. In addition to the fund management, HCAM also manages the assets with help from its partner of many years, BBAM, based in Dublin, Ireland. The lessee is Air Canada, Canada’s biggest airline, which emphasises the international nature of HCAM’s business. The competitiveness of the two aircraft has been enhanced through their successful modernisation by its partners.
Since 2009, we have been managing solar funds launched by HCI, Westfonds and GSI. In total, the funds managed by us hold 16 solar parks in Bavaria, Baden-Württemberg, Thuringia, Saxony, Saxony-Anhalt and Brandenburg. The total investment volume of these funds amounts to 172 million euros, with 55 million euros committed equity from 2,500 investors. The solar parks have a total capacity of 77 MWp. Since acquiring the solar parks, we have assumed responsibility for managing the business of both the fund and target companies, including fund and asset management. The latter particularly includes commercial operation of the limited partnerships which are the owner of the solar parks.
Life Insurance Funds
To date, companies belonging to Ernst Russ Group currently manage 15 life insurance funds in which they have placed a total of 561 million euros of equity capital. The funds invest in traded endowment policies in Germany and the UK.
A life insurance fund invests in existing endowment policy contracts. The price paid is less than the current value of the policies, but more than the surrender value offered by the Life Office for a premature surrender.
As a result of the company’s direct involvement in the managing of the funds and the asset management of all life insurance portfolios through its own subsidiaries, Ernst Russ AG has gained extensive expertise in this segment.
The solar and life insurance funds are managed within the company by the subsidiary Assetando.
Every single one of the private equity funds in the portfolio of the Ernst Russ Group is based on the concept of using funds of funds to offer investors opportunities in the market for growth capital (private equity and venture capital). For many years, the large minimum subscription amounts in this market segment restricted access primarily to institutional investors.
By investing in target funds with different areas of focus – such as sectors, regions or investment phases – the risks associated with private equity funds of funds are broadly diversified.
Moreover, the generally assumed blind pool characteristics of private equity funds are mitigated by partially preselecting target funds which have already invested in target companies. Although the private equity sector is not immune to economic uncertainty and risk, it has proven its ability to both resist and adapt.