Liquidity for closed-end real estate funds
Portrait
“We offer liquidity options for an otherwise illiquid market,” says Michael Siefert, managing director of Frankfurt-based Madison Real Estate. With 15 years of professional experience in real estate investments, Michael Siefert has in-depth knowledge of the German real estate market.
“There was an enormous market potential for the services we offer,” highlights Mr. Siefert. “On the one hand, there was no secondary market for closed-end real estate funds, and on the other hand, there was a growing number of investors looking for an exit scenario. Our liquidity options closed a gap in the market. As a result they were widely covered in the media as a genuine alternative and readily accepted by an increasing number of investors.”
Madison provides equity to purchase interests from investors seeking liquidity through an all-out exit or a passive joint venture equity partner. Thus Madison assumes partial ownership of the asset, allowing existing investors to maintain control of their investments.
Furthermore, Madison provides equity capital for capital stack restructurings. “We develop options for exit scenarios tailored to the characteristics of the funds and the financial interests of the investors.”
Madison pursues a simple and efficient investment strategy, highlights Mr. Siefert. “According to the motto ‘only the very best,’ we restrict our activities to core real estate assets. We focus on high-quality commercial real estate in good locations with solvent tenants, mainly in London, New York or other big US cities, as well as in large German cities. Our minimum investment size in an individual fund is 5 million USD. Madison is well capitalised, having raised more than one billion USD since 2002.”
Responsible for finding and evaluating investment opportunities, Mr. Siefert sees a growing demand for liquidity and thus strong market opportunities for Madison going forward. “Our sound capital base, professional approach, international experience and intimate knowledge of the real estate and funds markets, as well as our competence in intricate secondary market transactions make us a major player in our market niche and a competent partner for real estate investors. We build on a deep network of real estate professionals, and we utilize all existing PR channels to further strengthen our position. So we are well positioned indeed to take advantage of future growth potential.”