Mezzanine capital describes a hybrid form of equity and debt capital that is located in the capital structure of a project between the equity tranche and the debt tranche coming from the bank. Mezzanine financing thus offers investors the opportunity to minimise the use of equity in real estate investments and project developments. While investors have to use less equity capital and can operate several projects simultaneously through the use of mezzanine capital, attractive returns beyond the interest rate level attract mezzanine capital providers. Single family offices are increasingly acting as mezzanine capital providers. We present three in this article. This article is based on the unique List of the 300 largest single family offices with a real estate focus in Europe.
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Arvantis Group GmbH
The Arvantis Group GmbH acts as the single family office of Alexander Samwer. The investment holding combines 6 subsidiaries: Picus Capital, operating in the technology sector, Pacifico and Voltaro, both in the renewable energy segment and three subsidiaries with a real estate focus: Augustus, Fabrix and Linus. Linus GmbH acts as a platform for mezzanine capital investments: the GmbH, founded in 2016, reviews projects, selects suitable ones and initially invests the full amount. The secured project is then placed on the company’s own platform, where investors can now participate through mezzanine financing. Linus itself participates in each project with at least 25% and a mezzanine capital amount between EUR 3-20 million. The real estate portfolio of the Berlin-based GmbH comprises 42 financed projects with an invested capital of EUR 518 million.
JP Beteiligungsgesellschaft mbH
JP Beteiligungsgesellschaft mbH has a long tradition of over 200 years, which is continued with the asset management of a Hamburg family. In addition to its corporate finance branch, the Hamburg-based mbH focuses on real estate transactions and owns several residential properties in Hamburg and Berlin. The core of the company is real estate financing through joint ventures or mezzanine capital. The investment profile for mezzanine financing is between EUR 3-15 million in the asset classes residential, office, commercial and hotel. The asset management also invests in Germany, Austria and Switzerland with a preferred project duration of 2-3 years.
Mogk GmbH & Co. KG
The Mogk GmbH & Co. KG, the single family office of the Oliver Böttger family, invests in mezzanine capital with a small portfolio share. Founded in 2011, the company clearly focuses on real estate with an 80% portfolio share. The family office currently holds 23 investments with a value of EUR 43 million. The focus is on residential, office and hotel projects, each accounting for around 20% of the assets. Direct investments in commercial and residential real estate each account for approx. 15% of the assets. The share of investments with mezzanine capital at Mogk is around 2%.
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